Which of the following statements about centralized organizations is true?

Study for the Canadian Health Information Management Association (CHIMA) NCE Test. With flashcards and multiple choice questions, each query is clarified with hints and explanations to ensure you're well-prepared for your exam!

The statement that a centralized organization is highly cost-effective and makes management easier is true because centralized organizations streamline decision-making processes and maintain consistency across operations. In a centralized structure, authority and decision-making are concentrated at the top levels of management. This typically leads to more uniform policies and procedures, which can reduce costs associated with duplicating efforts across different departments or branches.

Centralized management can also simplify the environment for managers, as there is a clear chain of command and responsibility. This structure allows for faster implementation of decisions since fewer individuals are involved in the approval process. Consequently, organizations can benefit from economies of scale, thereby enhancing overall cost-effectiveness.

In contrast, the other options suggest elements like reflecting the interest of the worker, which often aligns more with decentralized organizations where employee input is more valued. Centralization tends to prioritize efficiency and control rather than individual employee interests, thus distinguishing the truth of the correct choice. Similarly, the assertion of allowing quick decisions or actions, while partially accurate, misses the comprehensive benefits of cost-effectiveness and management efficiency that centralization primarily addresses.

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