Suppose a firm has decided to break its departments down into smaller units. While this likely will help with __________ issues, it raises the possibility that poor decisions will result due to __________.
A)risk aversion; suboptimization
B)economies of scale; risk aversion
C)span of control; suboptimization
D)span of control; risk aversion
E)economies of scale; limited span of control

Question

Quizplus · Accepted Answer

Breaking departments into smaller units helps manage span of control issues by making it easier for managers to oversee operations. However, it can lead to suboptimization, where decisions benefit a unit but not necessarily the organization as a whole.

Suppose a Firm Has Decided to Break Its Departments Down