Which of the following is true of organizational structure?Group of answer choicesThe more rigid the organizational structure, the more efficiently the firm deals with change.Organizational structure is of little relevance to businesses with over fifteen employeesThe simpler the organizational structure, the more positive is its impact on cash flow.Organizational structure cannot add to or detract from customer value.
Question
Which of the following is true of organizational structure?Group of answer choicesThe more rigid the organizational structure, the more efficiently the firm deals with change.Organizational structure is of little relevance to businesses with over fifteen employeesThe simpler the organizational structure, the more positive is its impact on cash flow.Organizational structure cannot add to or detract from customer value.
Solution
To determine which statement about organizational structure is true, let's analyze each option step by step:
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"The more rigid the organizational structure, the more efficiently the firm deals with change."
- A rigid organizational structure typically means that there are strict rules and procedures in place. While this can provide stability, it often makes it harder for the organization to adapt to changes quickly. Therefore, this statement is generally false.
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"Organizational structure is of little relevance to businesses with over fifteen employees."
- Organizational structure becomes increasingly important as the number of employees grows. It helps in defining roles, responsibilities, and the flow of information. For businesses with over fifteen employees, having a clear organizational structure is crucial for efficient operation. Thus, this statement is false.
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"The simpler the organizational structure, the more positive is its impact on cash flow."
- A simpler organizational structure can lead to more efficient decision-making processes and reduced administrative costs, which can positively impact cash flow. Therefore, this statement is generally true.
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"Organizational structure cannot add to or detract from customer value."
- Organizational structure can significantly impact customer value. A well-designed structure can improve customer service, speed up response times, and enhance overall customer satisfaction. Conversely, a poorly designed structure can lead to inefficiencies and negatively affect customer value. Hence, this statement is false.
Based on the analysis, the correct answer is: "The simpler the organizational structure, the more positive is its impact on cash flow."
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