The Scalar Principle Suggests That Each Person Within an Organization

question 106

True/False

The scalar principle suggests that each person within an organization must have a clear reporting relationship to one and only one boss; newer models of organization design routinely¾and successfully¾violate this premise.

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Definitions:

Break-Even Revenue

The amount of income needed to cover all operating expenses, with no profit or loss.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent or salaries.

Variable Cost

Costs that change in proportion to the good or service that a business produces.

Profit

The financial gain obtained when the revenue from selling goods or services exceeds the total cost of producing them.