Decentralization Is More Likely to Occur When

question 113

Multiple Choice

Decentralization is more likely to occur when:

• A)an organization becomes so complex that senior executives cannot process all the decisions that significantly influence the business.
• B)corporate leaders want more consistent decisions across all work units.
• C)corporate leaders want to increase consistency and reduce costs across the organization.
• D)all of these occur.
• E)none of these occur.

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Definitions:

Economic Exposure

The risk that a company's cash flow, earnings, or future cash flows will be affected by changes in exchange rates.

Monetary Items

Assets and liabilities that are to be received or paid in a fixed or determinable amount of money.

Functional Currency

The main currency used by a business or economy, reflecting the primary economic environment in which it operates.

Shareholders' Equity

The residual interest in the assets of an entity that remains after deducting its liabilities, representing ownership value in the company.