When Functional Structures Are Compared with Divisionalized Structures, Functional Structures

question 118

Multiple Choice

When functional structures are compared with divisionalized structures, functional structures are known to:

• A)create better economies of scale.
• B)be more responsive to local markets.
• C)encourage employees to focus on the organization's superordinate goals.
• D)be more decentralized.
• E)be more responsive to client needs and reduce conflict across work units.

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Definitions:

Economic Profits

Profits calculated by subtracting both explicit and implicit costs from total revenue, showing the total return exceeding all opportunity costs.

Long-run Equilibrium

A state in which all factors of production and outputs are optimized, resulting in a stable economic environment without tendencies for change.

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and products that are similar across sellers, leading to price competition and efficiency.

Marginal Revenue

The boost in income achieved by selling one more unit of a product or service.