In November 2005, Traders on the Ground Sold Off a Significant

question 32

Multiple Choice

In November 2005, traders on the ground sold off a significant amount of Nike's shares while Nike's CEO was flying aboard the company's Gulfstream jet.The jet was malfunctioning and traders were watching television coverage of the event.This scenario illustrates which principle?

• A)Market prices reflect information
• B)Individuals respond to incentives
• C)Cash flows are the source of value
• D)The time value of money

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Definitions:

External Environments

All elements outside of an organization that can affect its performance and strategy, including economic, technological, socio-cultural, and legal factors.

Mechanistic Structures

Organizational frameworks characterized by rigorous procedures, clear hierarchies, and distinct roles, aiming for efficiency and predictability.

Organic Structures

Flexible and adaptive organizational structures that foster innovation, creativity, and responsiveness, emphasizing informal networks and decentralized decision-making.

Departmentalization

The method of dividing an organization into distinct departments, allowing for specialized functional areas that focus on specific tasks or duties.