Partnership can function as an efficient organizational form when partners have similar backgrounds and skills, and each of their income is largely determined by individual effort.

Question

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Partnership allows for shared decision making, division of labor, and pooling of resources. When partners have similar backgrounds and skills, they are more likely to work well together and complement each other's strengths. If each partner's income is determined largely by their own individual efforts, there is less potential for conflict over unequal contributions to the partnership.

Partnership Can Function as an Efficient Organizational Form When Partners