Which of the Following Is Not an Advantage of a Strategic

question 74

Multiple Choice

Which of the following is not an advantage of a strategic business unit (SBU) type of organizational structure?

• A) Divisions with similar products, markets, or technologies are formed into homogeneous groups that can achieve synergies.
• B) Divisional executives can respond quickly to market changes and opportunities.
• C) Planning and control by the corporate office is more manageable.
• D) The corporate office is more removed from the individual divisions.

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Definitions:

MC = MR

This refers to the point where Marginal Cost equals Marginal Revenue, often used as a condition for profit maximization in economic theory.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, reflecting the total financial gain of a business beyond breaking even.

Perfect Competitors

Entities in a market where no single buyer or seller has the power to influence the market price due to the industry's homogeneous nature and the presence of many participants.

ATC

Average Total Cost, which is calculated by dividing the total cost of production by the quantity of output produced.