What Is the Drawback of a Divisional Structure

question 46

Multiple Choice

What is the drawback of a divisional structure?

• A) It duplicates many functional skills.
• B) The close monitoring of items such as expenses may no longer occur.
• C) It is difficult to achieve scale economies in activities such as marketing and finance.
• D) It can often hinder growth because the founder is limited in his/her ability to address numerous firm details.

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Definitions:

Asymmetric Information

A situation in which one party in a transaction has more or superior information than the other, leading to an imbalance in the transaction.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay.

Producer Surplus

The difference between what producers are willing to accept for a good or service and the actual price they receive, reflecting producers' benefit.

Costume Jewelry

Fashionable jewelry made from non-precious materials, intended for temporary use with specific outfits rather than as long-term investments.