Decentralization may increase a firm's costs because ________.
A) lower level managers duplicate services that may be less expensive if centralized
B) information costs rise as top management needs additional reports to learn about decentralized units
C) lower level managers may make decisions that are not in the best interests of the firm as a whole
D) all of the above

Question

Quizplus · Accepted Answer

Decentralization can lead to duplication of services and higher information costs as lower level managers may need to provide additional reports to top management. Additionally, there is a risk that lower level managers may make decisions that prioritize their unit's interests over the overall interests of the firm. All of these factors can contribute to increased costs for a firm that has decentralized operations.

Decentralization May Increase a Firm's Costs Because ________