Firms organize production by using
A)command systems only.
B)incentive systems only.
C)command and incentive systems.
D)market systems only.
E)principal-agent systems only.

Question

Quizplus · Accepted Answer

Firms typically use a combination of command and incentive systems to organize production. Command systems set out firm-wide policies and procedures, while incentive systems motivate employees to meet firm goals and increase productivity. Firms may also use market systems to allocate resources and principal-agent systems to align the interests of managers and owners. However, these systems are typically used in conjunction with command and incentive systems. Therefore, the best answer is C.

Firms Organize Production by Using