Which of the Following Is NOT a Characteristic of a Highly

question 86

Multiple Choice

Which of the following is NOT a characteristic of a highly centralized organizational structure?

• A) Top-level managers retain decision authority for most strategic and operating activities.
• B) Strict control and enforcement of detailed procedures backed by rigorous managerial accountability is the most reliable way to keep the daily execution of strategy on track.
• C) Tight control from the top is a more effective means for coordinating company actions and makes it easy to fix accountability when things do not go well.
• D) One of the basic tenets is that most company personnel have neither the time nor the inclination to direct and properly control the work they are performing and, further, they lack the knowledge and judgment to make wise decisions about how best to do their work.
• E) The decision about where to draw the divisional lines depends foremost on the nature of the relatedness and the strategy-critical building blocks, in terms of which businesses have key value chain activities in common.

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Definitions:

Value-based Pricing

A pricing strategy where the price is set based on the perceived value to the customer rather than on the cost of production or historical prices.

Operating Costs

Expenses incurred in the normal operation of a business, including costs such as rent, utilities, payroll, and materials.

Useful Life

The estimated duration of time that an asset is expected to be functional and economically viable for its intended purpose.

Target Costing

A pricing method that involves subtracting a desired profit margin from a competitive market price to determine the maximum cost of production.