Fama and Jensen suggest that "the form of organization that survives in an activity is one that delivers the product demanded by customers at the lowest price while covering costs." This is an example of:
A) market and organizational efficiency.
B) market and organizational equity.
C) economic benchmarking.
D) defective organizational architecture.

Question

Quizplus · Accepted Answer

Fama and Jensen are discussing the concept of market efficiency, as the survival of an organization is dependent on its ability to meet customer demand at the lowest cost possible. They are also referencing organizational efficiency in terms of cost coverage. Market and organizational equity, economic benchmarking, and defective organizational architecture are not discussed in this statement.

Fama and Jensen Suggest That "The Form of Organization That