Which of the following factors encourage the use of decentralized decision making in subsidiary operations?
A) Homogeneous product lines
B) Low level of product diversification
C) Weak volume-to-unit cost relationship
D) High degree of technology

Question

Quizplus · Accepted Answer

Weak volume-to-unit cost relationship is a factor that encourages the use of decentralized decision making in subsidiary operations. Firms that are able to produce large quantities will have a lower cost per unit than those that produce at smaller amounts, and home-office management will often take the initiative to oversee sourcing, marketing, and overall strategy to keep costs down.

Which of the Following Factors Encourage the Use of Decentralized