The use of hierarchies is common in the modern corporation:
A) because of the principle of comparative advantage.
B) because of the principle of separation of decision management and decision control.
C) to avoid collective action problems.
D) to enhance employee buy-in.

Question

Quizplus · Accepted Answer

The use of hierarchies in modern corporations is primarily due to the principle of separation of decision management and decision control. This means that top-level managers make strategic decisions while lower-level managers and employees are responsible for executing those decisions. Hierarchies help to ensure that decisions are made efficiently and effectively, and that the organization as a whole operates smoothly.

The Use of Hierarchies Is Common in the Modern Corporation