Which of the Following Describes the Principle of Organizational Stability

question 43

Multiple Choice

Which of the following describes the principle of organizational stability?

• A) No organization should become overly dependent on one or several "indispensable" individuals.
• B) Grouping activities and people into organizational units.
• C) The right to direct others to conform to decisions, policies, rules, and objectives.
• D) Structure that combines line and staff authority.

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Definitions:

Outstanding Stock

Shares of a corporation that have been issued and are currently held by investors, including public shareholders and company insiders.

Authorized Stock

The maximum number of shares a corporation is legally permitted to issue, as specified in its corporate charter.

Noncumulative Nonparticipating

Noncumulative nonparticipating refers to a type of preferred stock where dividends do not accumulate if not declared and the stockholders do not participate in additional corporate earnings beyond the specified dividend rate.

Cash Dividends

Payments made by a company to its shareholders, usually in the form of cash, out of its profits or reserves.