Research indicates that the efficiencies of managing through centralized control may be ________ when the operating environments of divisions in multidivisional organizations are relatively ________.
A) greater; stable and predictable
B) static; stable and predictable
C) greater; turbulent and unpredictable
D) static; turbulent and unpredictable

Question

Quizplus · Accepted Answer

Research suggests that centralization of control is more efficient in stable and predictable environments, which are characterized by routine operations and low uncertainty. In such cases, centralization helps control costs, ensure consistency, and maintain quality standards across different units. In contrast, in turbulent and unpredictable environments, decentralization may be more appropriate as it allows for faster decision-making, greater flexibility, and local responsiveness. Decentralized units can adapt to diverse customer needs and changing market conditions, leading to innovation and growth.

Research Indicates That the Efficiencies of Managing Through Centralized Control