SpandoCorp Is a Diversified Firm That Makes Industrial, Military and Consumer

question 18

Multiple Choice

SpandoCorp is a diversified firm that makes industrial, military and consumer products from Spandex. SpandoCorp manages each of the businesses that it operates in as a separate division and treats each as a True profit-and-loss center. In this organization, Grace McKenna is responsible for deciding which set of businesses SpandoCorp will operate in and for encouraging behavior that is consistent with this strategy, Wells Tucker provides information to McKenna about the internal and external environments that she uses in her decision making, and Kelly Rae is one of the individuals who is responsible for evaluating the firm's decision making to ensure that it is consistent with the interests of equity holders.
-If SpandoCorp used a ________ budgeting process, it would assume that no project would receive funding for the future simply because it was funded in the past and would require each project to stand on its own merits each year to be included in a list of important projects that the firm can afford to fund.

• A) zero-based
• B) cost plus
• C) dynamic
• D) traditional

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Definitions:

Power Elite

A small group of powerful individuals at the top of the political, military, and economic institutions who hold significant influence over the decision-making processes in society.

Economic Positions

The status or place of individuals or groups within the economic structure of society, influenced by factors like income, wealth, and occupation.

Political Action Committees

Organizations that collect funds from members and donate those funds to campaign for or against political candidates, legislation, or policies.

Legitimate Right

A recognized or sanctioned entitlement or authority within a social or legal framework.