What type of relationship ensures independent decision-making between two organizations?

What type of relationship ensures independent decision-making between two organizations?

• A. Consolidated Relationship
• B. Dependent Relationship
• C. Arms Length Relationship
• D. Collaborative Relationship

Answer: (C)

An arms-length relationship between two organizations is characterized by the independence of decision-making, where each entity maintains its autonomy and operates without undue influence from the other. In this type of relationship, the parties involved interact with a clear boundary that preserves their individual interests and governance structures. This ensures that decisions made by each organization reflect its own policies, objectives, and strategies, rather than being swayed or coerced by the interests of the other party. In contrast, a consolidated relationship typically indicates a merger or a significant integration where one organization heavily influences or controls the other, likely compromising independent decision-making. A dependent relationship indicates a scenario where one organization relies on another, which can also erode the independence in decisions. A collaborative relationship, while involving some degree of partnership, may lead to joint decisions that can blur the lines of autonomy. Thus, the arms-length relationship is the most suitable descriptor for ensuring independent decision-making between organizations.

An arms-length relationship between two organizations is characterized by the independence of decision-making, where each entity maintains its autonomy and operates without undue influence from the other. In this type of relationship, the parties involved interact with a clear boundary that preserves their individual interests and governance structures. This ensures that decisions made by each organization reflect its own policies, objectives, and strategies, rather than being swayed or coerced by the interests of the other party.

In contrast, a consolidated relationship typically indicates a merger or a significant integration where one organization heavily influences or controls the other, likely compromising independent decision-making. A dependent relationship indicates a scenario where one organization relies on another, which can also erode the independence in decisions. A collaborative relationship, while involving some degree of partnership, may lead to joint decisions that can blur the lines of autonomy. Thus, the arms-length relationship is the most suitable descriptor for ensuring independent decision-making between organizations.