Which Statement About Organizational Structure Is TRUE

question 106

Multiple Choice

Which statement about organizational structure is TRUE?

• A) As a company gets larger, it tends to adopt a decentralized structure.
• B) Decentralized firms tend to have many layers of management.
• C) The purpose of centralization is to make a company more responsive to a changing, complex environment.
• D) In a centralized organization, most decision-making authority is held by lower-level managers.

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Definitions:

Financial Assets

Assets that derive value from a contractual promise or ownership right, including stocks, bonds, derivatives, and bank balances.

Consumption Timing

The decision-making process regarding when to spend money on goods and services, balancing current consumption against future needs.

Allocation Of Risk

Allocation of Risk involves distributing exposure to financial risks among various participants or financial instruments to manage potential losses more effectively.

Ownership And Control

Refers to the legal and operational authority over assets or business, which may not always coincide, especially in corporations with dispersed shareholders.