In a Company Where Units Are Given Autonomy to Work

question 59

Multiple Choice

In a company where units are given autonomy to work independently,but are now asked to work together,the units may become territorial and refuse to share ideas for fear of being eliminated.This functional structure will produce which drawback?

• A)Inability to support cost competency
• B)Cascading effect of errors
• C)Redundancy across units
• D)Low levels of centralization
• E)Self-cannibalization

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Definitions:

Decentralizing Decision Making

The distribution of decision-making authority away from a central figure or location to lower-level employees or divisions within an organization.

Information Transfer

The process of conveying data from one place, person, or entity to another.

Incentive Compensation

A form of payment designed to motivate and reward employees for exceeding their performance targets or objectives.

Agency Costs

Costs incurred from conflicts of interest among stakeholders, particularly between management (agents) and shareholders (principals).