Bureaucratic costs are greatest in a ________ structure.
A) market
B) multidivisional
C) geographic
D) product division

Question

Quizplus · Accepted Answer

Bureaucratic costs refer to the expenses incurred in maintaining a bureaucratic system, such as formal hierarchy, standard procedures, and rules and regulations. In a multidivisional structure, where the organization is divided into several semi-autonomous units, each with its own management team and resources, there is a higher likelihood of bureaucratic costs since there are more layers of authority and decision-making. This can lead to duplication of efforts, lack of coordination, and slower response times, all of which contribute to higher costs. In contrast, a market structure, where the organization operates in a highly competitive environment and is driven by customer demand, tends to have fewer bureaucratic costs since it requires flexibility and responsiveness rather than rigid structures and procedures. A geographic or product division structure may have some bureaucratic costs, depending on their level of centralization and standardization.

Bureaucratic Costs Are Greatest in a ________ Structure