Which statement about organizational structure is true?
A) Decentralized firms tend to have many layers of management.
B) As a company gets larger, it tends to adopt a decentralized structure.
C) The purpose of centralization is to make a company more responsive to a changing, complex environment.
D) In a centralized organization, most decision-making authority is held by lower-level managers.
E) Decentralized companies must change to centralized structures in response to unpredictable environments.

Question

Quizplus · Accepted Answer

As a company grows larger, it becomes more difficult for top-level management to make all the important decisions. Therefore, decentralized structures, where decision-making authority is given to lower-level managers, are often adopted to make the organization more efficient.

Note: None of the other statements are true. Decentralized firms tend to have fewer layers of management (A), the purpose of centralization is to create a more rigid and standardized structure (C), and in a centralized organization, most decision-making authority is held by top-level managers (D). Additionally, decentralized organizations may choose to remain decentralized even in unpredictable environments (E).

Which Statement About Organizational Structure Is True