One Problem with a Functional Structure Is That

question 161

Multiple Choice

One problem with a functional structure is that

• A)employees have difficulty creating career paths within their area of knowledge.
• B)it is more difficult to directly supervise employees within each department.
• C)it makes it difficult to permit greater specialization of skills.
• D)it prevents companies from creating economies of scale in their pool of talent.
• E)it emphasizes subunit goals more than organizational goals.

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Definitions:

Required Return

The minimum expected return by an investor for investing in a particular security or project, considering the risk associated with the investment.

M&M II

Part of Modigliani and Miller's capital structure theories, specifically the proposition that the value of a firm is independent of its capital structure under certain market conditions and tax considerations.

Economic Expansion

A phase of the business cycle where economic activity and output increase, indicating growth in the economy.

EBIT

Earnings Before Interest and Taxes - a measure of a firm's profit that includes all expenses except interest and income tax expenses.