A Disadvantage of Centralization Is That

question 76

Multiple Choice

A disadvantage of centralization is that:

• A) it is hard to predict employees' behavior.
• B) it makes coordination difficult.
• C) top managers may neglect strategic decision making about future organizational activities such as deciding on which strategy to use to expand globally.
• D) top managers may neglect operational decision making about day-to-day activities such as hiring.

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Definitions:

Government Loan Guarantees

Programs where the government promises to repay a loan in case the borrower defaults, typically used to encourage lending to certain sectors or projects.

Privatizing Gains

Privatizing gains involves the process of shifting profits and benefits from the public sector to private entities, highlighting a move towards more privatized economic activities.

Debt Crisis

An economic crisis in which government debt has risen so high that the government is unable to borrow any more money due to people losing faith in the government’s ability to repay. Leads to either massive spending cuts or large tax increases, either of which will likely plunge the economy into a recession.

Fiscal Stimulus

Government policy aimed at encouraging economic growth through increased public spending or tax reductions, aiming to raise aggregate demand.