The Disadvantages of a Centralized Organizational Structure Include

question 11

Multiple Choice

The disadvantages of a centralized organizational structure include

• A) lengthening response times and discouraging lower-level managers and rank-and-file employees from exercising initiative.
• B) a loss of top management control.
• C) putting too much decision making authority in the hands of lower-level company personnel.
• D) making it hard to fix accountability when things do not go well and putting the organization at risk when bad decisions are made.
• E) impeding cross-unit coordination and capture of strategic fits.

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Definitions:

Agency Law

Legal principles and rules governing the relationship where one party, the agent, is authorized to act on behalf of another, the principal, in dealings with third parties.

Business Activity

Any action undertaken by individuals or companies involving the production, distribution, or sale of goods and services.

Principals

In a commercial context, the parties who enter into a contract or agreement, authorizing agents to act on their behalf in transactions.

Contracts

Legally binding agreements between two or more parties that create mutual obligations enforceable by law.