When top management controls the major functions of an organization it is called:
A)Centralization
B)Decentralization
C)Optimization
D)An unfavorable overhead variance

Question

Quizplus · Accepted Answer

When top management controls the major functions of an organization, it is known as Centralization. In a centralized organization, all the important decisions are taken by the top-level management, and the lower-level management is responsible for implementing those decisions. This type of management structure is best suited for small organizations or those that operate in a stable environment. Decentralization, on the other hand, involves delegating decision-making powers to lower-level managers, thereby empowering them to make decisions on their own. This type of management structure is best suited for large organizations that operate in a dynamic environment. Optimization is the process of improving efficiency or effectiveness by making the best use of available resources, and an unfavorable overhead variance refers to a situation in which the actual overhead costs are higher than the budgeted overhead costs.

When Top Management Controls the Major Functions of an Organization