Which of the Following Is a Disadvantage of a Decentralized

question 59

Multiple Choice

Which of the following is a disadvantage of a decentralized organizational structure?

• A) Increasing the size of the corporate bureaucracy
• B) Reducing a company's response times to changing external events
• C) Discouraging lower-level managers and rank-and-file employees from exercising initiative
• D) Putting the organization at risk if higher-level management is unaware of their actions
• E) Creating more layers of management

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Definitions:

Common-Size Statement

A financial statement in which all items are expressed as a percentage of a common base figure, facilitating comparison across different periods or companies.

Net Fixed Assets

The value of a company’s long-term, tangible assets minus any depreciation, representing the net book value of physical assets.

Inventory

The goods and materials that a business holds for the ultimate goal of resale or processing in the production process.

Profit Margin

A financial metric reflecting the percentage of revenue that remains as profit after all expenses are paid, used to assess a company's financial health and efficiency.