(Select 2) What factors favor centralized decision-making?

Question

Options

• AInfrequent decisions.
• BNeed for fast decision-making.
• CEconomies of scale
• DAppropriate authority level of the decision maker.
• EHigh cost of delay

• A
  81% (43)
• B
  4% (2)
• D
  11% (6)
• E
  4% (2)

Explanation

Centralized decision-making is favored when decisions are infrequent (A) because the cost of maintaining specialized central expertise is justified when the decision doesn't need to happen constantly - routing it upward is efficient rather than burdensome. Economies of scale (C) also favor centralization because consolidating decisions around purchasing, resource allocation, or policy creates cost savings that only work when a single authority controls the process.

B (fast decision-making) and E (high cost of delay) are the most tempting distractors - both actually favor decentralization, because speed requires authority at the point of action, not a slow chain up to headquarters. D (appropriate authority level) is a general decision-making principle that can justify either centralized or decentralized structures depending on context - it doesn't specifically favor either.

Memory tip: Think "Rare and Bulk" - centralize when decisions are rare (infrequent) or benefit from bulk (scale). Speed-related factors always point the opposite direction toward decentralization.

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