Which of the Following Is Considered a Disadvantage of Excessive

question 16

Multiple Choice

Which of the following is considered a disadvantage of excessive decentralization?

• A)It leads to slow and distorted communication
• B)Managers no longer make decisions
• C)Divisions and functions may begin to pursue their own goals at the expense of organizational goals
• D)Employees are better able to recognize and respond to customer needs
• E)It leads to groupthink.

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Definitions:

Relaxed Working Capital Policies

Financial strategies that involve maintaining higher levels of current assets than necessary or reducing short-term liabilities, aiming for greater flexibility and lower risk of liquidity problems.

Short-term Loans

Borrowed funds that require repayment within a shorter timeframe, typically less than one year.

Long-term Loans

Financial obligations that are due for repayment over a period longer than one year.

Conservative Financing

A strategy prioritizing lower risk financing options, typically involving higher equity and lower debt levels to minimize insolvency risks.