Culture Is Most Likely to Be a Liability When ________

question 5

Multiple Choice

Culture is most likely to be a liability when ________.

• A) the employees of the organization are highly skilled
• B) the organization's environment is dynamic
• C) the organization's management is highly efficient
• D) the organization is highly centralized
• E) the organization scores low on the degree of formalization

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Definitions:

Coase Theorem

The Coase Theorem posits that if trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property.

Externality Problems

Occurrences in which the production or consumption of goods and services imposes costs or benefits on third parties not involved in the transaction.

Government Intervention

The involvement by government in the market to influence the allocation of resources and distribution of income.

Coase Theorem Solution

A theory suggesting that if trade or negotiation over property rights is allowed without cost, parties can reach an agreement regarding the allocation of resources regardless of the initial allocation.