Many Organizations Have Many Functional Areas with Very Diverse, and Sometimes

question 34

Multiple Choice

Many organizations have many functional areas with very diverse, and sometimes competing, interests. Such organizations will be most effective if:

• A) each functional area focuses on achieving their own goals.
• B) functional areas work together to attain overall goals.
• C) goals are defined at the bottom and implemented at the top.
• D) management and employees have separate goals.

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Definitions:

External Financing Needed

The amount of funding that a company must seek from external sources to finance its planned activities or investments, beyond what it can generate internally.

Capital Intensity Ratio

A measure of how much capital is used in relation to labor in the production process of a company.

Return on Assets (ROA)

A profitability ratio calculated by dividing net income by total assets, indicating how efficiently a company is using its assets to generate profit.

Percentage of Sales Approach

A method for forecasting financial needs based on the proportion of sales expected in the future.