Question 1

The size of an organization and the proportion of its workers in managerial roles is directly proportional.

Accepted Answer

A) True 
 B)False  True

Question 2

The board of directors of Fast Food Inc., have the final say in all decisions made for the firm.Market conditions and recent poor performance has caused some discord among the board members.Which of the following statements is likely to be true?

Accepted Answer

A) The decisions the board members take may lead to compromises that are not in the interests of the shareholders. 
B) Decision-making will be decentralized in this firm. 
C) People lower in the hierarchy of this firm will be better equipped to take decisions. 
D) The board's incentives are aligned with those of the firm's principals. 
A) The decisions the board members take may lead to compromises that are not in the interests of the shareholders. 
B) Decision-making will be decentralized in this firm. 
C) People lower in the hierarchy of this firm will be better equipped to take decisions. 
D) The board's incentives are aligned with those of the firm's principals. A

Question 3

Joanne can choose to selectively disclose information to her superiors in an attempt to elicit decisions in her favor if:

Accepted Answer

A) the information is easily available to all. 
B) she is the only source of the information concerned. 
C) the information is easily verifiable. 
D) there are other sources of the same information in the firm. 
A) the information is easily available to all. 
B) she is the only source of the information concerned. 
C) the information is easily verifiable. 
D) there are other sources of the same information in the firm. B

Question 4

Which of the following was a consequence of the financial revolution which drastically changed risk management in the 1970s?

Accepted Answer

A) Managements created separate categories for handling different types of risks. 
B) A group of specialists were created who handled risk assessment for the entire organization and reported only to headquarters. 
C) Risk analysis was decentralized by concentrating on risks at the division-level. 
D) It became easier to assess market risk with the introduction of various new tools of financial management. 
A) Managements created separate categories for handling different types of risks. 
B) A group of specialists were created who handled risk assessment for the entire organization and reported only to headquarters. 
C) Risk analysis was decentralized by concentrating on risks at the division-level. 
D) It became easier to assess market risk with the introduction of various new tools of financial management.

Question 5

How does a self-contained unit benefit a firm?

Accepted Answer

A self-contained unit that bridges an M-

Question 6

Define an M-form organization and discuss its advantages over a U-form organization.

Accepted Answer

A divisionalized firm is often called M-

Question 7

The method of payment that a principal can use to elicit effort from an agent is called:

Accepted Answer

A) a contract. 
B) an order. 
C) an incentive. 
D) garbling. 
A) a contract. 
B) an order. 
C) an incentive. 
D) garbling.

Question 8

What factors determine how centralized or decentralized the decision-making in an organization should be?

Accepted Answer

The determining factors are the firms me

Question 9

Globalization aids geographic divisionalization in an organization.

Accepted Answer

A) True 
 B)False

Question 10

When each box in an organization chart contains individuals who specialize in some field, then the activities in the organization are categorized by _____.

Accepted Answer

A) divisionalization 
B) functionalization 
C) decentralization 
D) de-integration 
A) divisionalization 
B) functionalization 
C) decentralization 
D) de-integration

Question 11

Which of the following is true about the differences between M-form and U-form firms?

Accepted Answer

A) As M-form firms are more diversified, it is more difficult for the management to acquire and compare information about products and locations than a U-form firm. 
B) A U-form firm can better incentivize managers than M-form firms. 
C) In an M-form firm the interests of executives in product or geographic divisions can be better aligned with those of shareholders compared to a U-form firm. 
D) M-form firms usually operate in fewer markets than U-form firms. 
A) As M-form firms are more diversified, it is more difficult for the management to acquire and compare information about products and locations than a U-form firm. 
B) A U-form firm can better incentivize managers than M-form firms. 
C) In an M-form firm the interests of executives in product or geographic divisions can be better aligned with those of shareholders compared to a U-form firm. 
D) M-form firms usually operate in fewer markets than U-form firms.

Question 12

A matrix form is more likely to be found in organizations which:

Accepted Answer

A) produce one product and operate in a single market. 
B) produce many products and operate in a single market. 
C) produce one product and operate in multiple markets. 
D) produce many products and operate in multiple markets. 
A) produce one product and operate in a single market. 
B) produce many products and operate in a single market. 
C) produce one product and operate in multiple markets. 
D) produce many products and operate in multiple markets.

Question 13

Identify the correct statement about relationships depicted in an organization chart.

Accepted Answer

A) A line that links an individual/division with the same at a lower level depicts informal authority of the former over the latter. 
B) Equality on the chart for individuals A and B must mean they both have the same authority in practice. 
C) It shows all relations between employees of an organization. 
D) A line that links an individual/division with the same at a lower level depicts formal authority of the former over the latter. 
A) A line that links an individual/division with the same at a lower level depicts informal authority of the former over the latter. 
B) Equality on the chart for individuals A and B must mean they both have the same authority in practice. 
C) It shows all relations between employees of an organization. 
D) A line that links an individual/division with the same at a lower level depicts formal authority of the former over the latter.

Question 14

How does a firm's organizational structure affect its market performance?

Accepted Answer

A firm's internal organization is one of

Question 15

An information is beneficial to the decision-maker only when:

Accepted Answer

A) its marginal cost is zero. 
B) its marginal benefits exceeds its marginal cost. 
C) the possibility of inaccurate transmission is nullified. 
D) its marginal benefit is positive. 
A) its marginal cost is zero. 
B) its marginal benefits exceeds its marginal cost. 
C) the possibility of inaccurate transmission is nullified. 
D) its marginal benefit is positive.

Question 16

The information to be gathered for a decision depends on which of the following?

Accepted Answer

A) The current market conditions and on the expected costs and benefits of acquiring the information. 
B) The model that underlies a decision and on the expected costs and benefits of acquiring the information. 
C) The cost of the information and the current market conditions. 
D) The model that underlies a decision and the amount of information that is internally available. 
A) The current market conditions and on the expected costs and benefits of acquiring the information. 
B) The model that underlies a decision and on the expected costs and benefits of acquiring the information. 
C) The cost of the information and the current market conditions. 
D) The model that underlies a decision and the amount of information that is internally available.

Question 17

Moving decisions downward into functional areas economizes on information and is efficient because a functional department is by definition expert at a subset of the firm's activities.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is a disadvantage of the U-form structure?

Accepted Answer

A) In case of multiple products sold in different markets, a U-form structure is difficult to maintain. 
B) A U-form structure requires a larger staff to evaluate top-level decision making than other organization structures. 
C) A U-form structure necessitates a multiple-level decision-making process. 
D) The amount of information that is considered for decision-making in a U-form structure is less than other structures. 
A) In case of multiple products sold in different markets, a U-form structure is difficult to maintain. 
B) A U-form structure requires a larger staff to evaluate top-level decision making than other organization structures. 
C) A U-form structure necessitates a multiple-level decision-making process. 
D) The amount of information that is considered for decision-making in a U-form structure is less than other structures.

Question 19

-Refer to Figure .Which of the following statements is true regarding A, B, and C in this structure?

Accepted Answer

A) They can each function as stand-alone firms. 
B) They must have similar substructures. 
C) They are different functional departments within the organization. 
D) They have no authority to take final decisions. 
A) They can each function as stand-alone firms. 
B) They must have similar substructures. 
C) They are different functional departments within the organization. 
D) They have no authority to take final decisions.

Question 20

What is an organization chart?

Accepted Answer

An organization chart describe

The size of an organization and the proportion of its workers in managerial roles is directly proportional.

The board of directors of Fast Food Inc., have the final say in all decisions made for the firm.Market conditions and recent poor performance has caused some discord among the board members.Which of the following statements is likely to be true?

Joanne can choose to selectively disclose information to her superiors in an attempt to elicit decisions in her favor if:

Which of the following was a consequence of the financial revolution which drastically changed risk management in the 1970s?

How does a self-contained unit benefit a firm?

Define an M-form organization and discuss its advantages over a U-form organization.

The method of payment that a principal can use to elicit effort from an agent is called:

What factors determine how centralized or decentralized the decision-making in an organization should be?

Globalization aids geographic divisionalization in an organization.

When each box in an organization chart contains individuals who specialize in some field, then the activities in the organization are categorized by _____.

Which of the following is true about the differences between M-form and U-form firms?

A matrix form is more likely to be found in organizations which:

Identify the correct statement about relationships depicted in an organization chart.

How does a firm's organizational structure affect its market performance?

An information is beneficial to the decision-maker only when:

The information to be gathered for a decision depends on which of the following?

Moving decisions downward into functional areas economizes on information and is efficient because a functional department is by definition expert at a subset of the firm's activities.

Which of the following is a disadvantage of the U-form structure?

-Refer to Figure .Which of the following statements is true regarding A, B, and C in this structure?

What is an organization chart?

Reasoning With Economics: Models and Information

Transactions and Institutions: the Building Blocks

Markets

Cost and Production

Extreme Markets I: Perfect Competition

Extreme Markets II: Monopoly

Between the Extremes: Interaction and Strategy

Competition and Strategy

Beyond Markets; Property and Contracts

The Economics of Contracts

Risk and Information in Contracts

Organizations in Concept and Practice

Vertical Relationships

Employment Relationships

Time, Risk and Options

Conflict, Negotiation and Group Choice

Filters

Exam 13: Organizational Design

The size of an organization and the proportion of its workers in managerial roles is directly proportional.

The board of directors of Fast Food Inc., have the final say in all decisions made for the firm.Market conditions and recent poor performance has caused some discord among the board members.Which of the following statements is likely to be true?

Joanne can choose to selectively disclose information to her superiors in an attempt to elicit decisions in her favor if:

Which of the following was a consequence of the financial revolution which drastically changed risk management in the 1970s?

How does a self-contained unit benefit a firm?

Define an M-form organization and discuss its advantages over a U-form organization.

The method of payment that a principal can use to elicit effort from an agent is called:

What factors determine how centralized or decentralized the decision-making in an organization should be?

Globalization aids geographic divisionalization in an organization.

When each box in an organization chart contains individuals who specialize in some field, then the activities in the organization are categorized by _____.

Which of the following is true about the differences between M-form and U-form firms?

A matrix form is more likely to be found in organizations which:

Identify the correct statement about relationships depicted in an organization chart.

How does a firm's organizational structure affect its market performance?

An information is beneficial to the decision-maker only when:

The information to be gathered for a decision depends on which of the following?

Moving decisions downward into functional areas economizes on information and is efficient because a functional department is by definition expert at a subset of the firm's activities.

Which of the following is a disadvantage of the U-form structure?

-Refer to Figure .Which of the following statements is true regarding A, B, and C in this structure?

What is an organization chart?

Reasoning With Economics: Models and Information

Transactions and Institutions: the Building Blocks

Markets

Cost and Production

Extreme Markets I: Perfect Competition

Extreme Markets II: Monopoly

Between the Extremes: Interaction and Strategy

Competition and Strategy

Beyond Markets; Property and Contracts

The Economics of Contracts

Risk and Information in Contracts

Organizations in Concept and Practice

Vertical Relationships

Employment Relationships

Time, Risk and Options

Conflict, Negotiation and Group Choice

Filters