Which of the Following Is a Disadvantage of Decentralization

question 115

Multiple Choice

Which of the following is a disadvantage of decentralization?

• A) Decisions made by one manager may negatively affect the profitability of the entire company.
• B) Helps retain quality managers.
• C) Decision making by managers closest to the operations.
• D) Managers are able to acquire expertise in their areas of responsibility.

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Definitions:

Discounted Future Profits

The present value of the expected future earnings of a company, discounted at an appropriate rate to account for risk and time.

Antitrust Enforcement

The regulation and actions taken by the government to prevent monopolies and promote competition in the marketplace.

Vertical Relationships

Interactions and agreements between businesses at different stages of the production process, like suppliers and retailers.

Horizontal Contracts

Agreements between firms or entities at the same level of the market structure, often aimed at cooperation or co-marketing strategies.