Giving a division manager the ability to set product prices is one component of his or her ______.

Giving a division manager the ability to set product prices is one component of his or her ______.

• A. Decision rights assignment
• B. Budget authority
• C. Performance evaluation
• D. Reward system

Answer: (A)

This question tests decision rights assignment. Giving a division manager the authority to set product prices hands them the right to make pricing decisions for their unit, which is a fundamental example of who has decision-making power within the organization. In a decentralized control setup, clarifying these decision rights lets managers act autonomously in areas like pricing, improving responsiveness and accountability for results. Budget authority focuses on controlling resources and spending, not setting prices; performance evaluation is about assessing outcomes; reward systems concern incentives. So the act of granting price-setting power best fits the idea of decision rights assignment.

This question tests decision rights assignment. Giving a division manager the authority to set product prices hands them the right to make pricing decisions for their unit, which is a fundamental example of who has decision-making power within the organization. In a decentralized control setup, clarifying these decision rights lets managers act autonomously in areas like pricing, improving responsiveness and accountability for results. Budget authority focuses on controlling resources and spending, not setting prices; performance evaluation is about assessing outcomes; reward systems concern incentives. So the act of granting price-setting power best fits the idea of decision rights assignment.