Compare Ternary Software with Wal-Mart (In Practice Activity)

question 63

Multiple Choice

Compare Ternary Software with Wal-Mart (In Practice activity) . These two companies illustrate the concept that:

• A) Larger organizations need to have tight controls at the top.
• B) Successful organizations can have very different strategies and goal emphases.
• C) A moderate to high level of formalization is crucial to an organization's success.
• D) Centralization is necessary in organizations when they face high levels of competition.

---

Definitions:

Hidden Actions

Pertains to situations in principal-agent relationships where agents' specific actions are not observable by the principal, leading to a moral hazard.

Hidden Information

Information that is not known to one party in a transaction, which can lead to an imbalance of power or adverse selection.

Moral Hazard

A situation where one party is more likely to take risks because another party bears the consequences of those risks, often arising in insurance and finance contexts.

Government Bailouts

Financial support provided by the government to prevent the failure of a struggling company or industry, often to stabilize the economy and preserve jobs.