Question 1

Firms grant decision rights to teams of employees for all of the following reasons except to:

Accepted Answer

A)  manage activities 
B)  make products 
C)  make basic investment decisions 
D)  recommend actions 
A)  manage activities 
B)  make products 
C)  make basic investment decisions 
D)  recommend actions C

Question 2

What are some of the demerits of decentralization?

Accepted Answer

Because local managers may have other incentives to maximize their own utility, they might act in ways to jeopardize the team's value creation capabilities. To prevent this, one must undertake direct monitoring or develop a clever compensation mechanism. But these are usually difficult and costly.

Question 3

Empowerment may be a problem because:

Accepted Answer

A)  managers are never eager to empower anyone else except themselves. 
B)  managers are usually ambiguous when it comes to empowerment. 
C)  workers are always eager to empower themselves even though they are usually unqualified. 
D)  managers are usually very eager to empower those who are least qualified. 
A)  managers are never eager to empower anyone else except themselves. 
B)  managers are usually ambiguous when it comes to empowerment. 
C)  workers are always eager to empower themselves even though they are usually unqualified. 
D)  managers are usually very eager to empower those who are least qualified. B

Question 4

Bob is given the right to make a decision. This is an example of:

Accepted Answer

A)  decentralized decision making. 
B)  centralized decision making. 
C)  bundling. 
D)  a nonstandard practice within a hierarchy. 
A)  decentralized decision making. 
B)  centralized decision making. 
C)  bundling. 
D)  a nonstandard practice within a hierarchy.

Question 5

The issue with centralization versus decentralization is:

Accepted Answer

A)  that centralization is always better because one person controls all information. 
B)  that it is difficult to find out whether one is better than the other in the hierarchy. 
C)  that decentralization is always better because many people can split the tasks. 
D)  that it is always easy to find out which is better but not all may agree. 
A)  that centralization is always better because one person controls all information. 
B)  that it is difficult to find out whether one is better than the other in the hierarchy. 
C)  that decentralization is always better because many people can split the tasks. 
D)  that it is always easy to find out which is better but not all may agree.

Question 6

Decision management is made up of:

Accepted Answer

A)  initiation and ratification of projects. 
B)  implementation and monitoring of projects. 
C)  ratification and monitoring of projects. 
D)  initiation and implementation of projects. 
A)  initiation and ratification of projects. 
B)  implementation and monitoring of projects. 
C)  ratification and monitoring of projects. 
D)  initiation and implementation of projects.

Question 7

A job in sales - such as a sales representative for an agricultural chemical company - usually represents:

Accepted Answer

A)  many tasks and little sales authority. 
B)  few tasks and very little sales authority. 
C)  many tasks and a lot of sales authority. 
D)  few tasks and a lot of sales authority. 
A)  many tasks and little sales authority. 
B)  few tasks and very little sales authority. 
C)  many tasks and a lot of sales authority. 
D)  few tasks and a lot of sales authority.

Question 8

The use of hierarchies is common in the modern corporation:

Accepted Answer

A)  because of the principle of comparative advantage. 
B)  because of the principle of separation of decision management and decision control. 
C)  to avoid collective action problems. 
D)  to enhance employee buy-in. 
A)  because of the principle of comparative advantage. 
B)  because of the principle of separation of decision management and decision control. 
C)  to avoid collective action problems. 
D)  to enhance employee buy-in.

Question 9

Decentralized decision-making is very controversial in a corporate environment. Central office managers feel like they are losing control of managers in specific plants or regional offices. What are some of the issues that must be reviewed before making the final decision on where to place final decision-making power?

Accepted Answer

Benefits of decentralization include mor

Question 10

Kevin Freeman's artificial knee research team has discovered an improved materials handling procedure that reduces contamination of the product during assembly. The issue for the company is:

Accepted Answer

A)  how this specific knowledge can be transferred to the company's whole production process. 
B)  whether or not this specific knowledge can be implemented in the knee team's process. 
C)  not important, because all new knowledge is always transferred to general corporate use. 
D)  not important, since this specific knowledge can be kept secret and capitalized later 
A)  how this specific knowledge can be transferred to the company's whole production process. 
B)  whether or not this specific knowledge can be implemented in the knee team's process. 
C)  not important, because all new knowledge is always transferred to general corporate use. 
D)  not important, since this specific knowledge can be kept secret and capitalized later

Question 11

Which of the following is not a benefit to decentralization of corporate decision-making?

Accepted Answer

A)  Incentive problems 
B)  More effective use of local knowledge 
C)  Conservation of time of senior management 
D)  Training and motivation for local managers 
A)  Incentive problems 
B)  More effective use of local knowledge 
C)  Conservation of time of senior management 
D)  Training and motivation for local managers

Question 12

We say that a firm is vertically integrated if:

Accepted Answer

A)  it makes a lot of its own outputs. 
B)  it makes a lot of its own inputs. 
C)  it centralizes all output decisions but decentralizes pricing decisions. 
D)  it decentralizes all input purchases but centralizes output levels. 
A)  it makes a lot of its own outputs. 
B)  it makes a lot of its own inputs. 
C)  it centralizes all output decisions but decentralizes pricing decisions. 
D)  it decentralizes all input purchases but centralizes output levels.

Question 13

In addition to other factors, the increased use of technology and the reduced costs of information transfer from local office to corporate headquarters has:

Accepted Answer

A)  significantly increased the need for centralized decision making. 
B)  only brought about increased costs to decentralization. 
C)  reduced needs for middle managers and increased the scope of local decision making powers. 
D)  shown that technology has little impact on the centralization issue. 
A)  significantly increased the need for centralized decision making. 
B)  only brought about increased costs to decentralization. 
C)  reduced needs for middle managers and increased the scope of local decision making powers. 
D)  shown that technology has little impact on the centralization issue.

Question 14

Which one of the following is not a benefit of decentralization:

Accepted Answer

A)  effective use of local knowledge. 
B)  possibility to shirk, enjoy the credit from free riding. 
C)  conservation of management time. 
D)  possibility to increase motivation and productivity. 
A)  effective use of local knowledge. 
B)  possibility to shirk, enjoy the credit from free riding. 
C)  conservation of management time. 
D)  possibility to increase motivation and productivity.

Question 15

In his seminar in Organizational Economics, Professor Chang always uses study teams for presentation of outside research materials. He has found that three students per team tend to work well. Walking into a new class, he finds that registration has allowed 60 students to sign up. He decides to increase the team size from 3 to 8 students. What problems can he expect to deal with during the semester?

Accepted Answer

Chang is likely to hear more student com

Question 16

Under what conditions will decentralization be beneficial?

Accepted Answer

The net benefits of decentralization wil

Question 17

Always Round Tire has service stores in many parts of the country. The stores in Tennessee have petitioned for local store manager independence. The managers claim that since Memphis, Nashville, and Knoxville are hundreds of miles apart that each manager is really in a separate market and needs to deal with local marketing, sales, and pricing issues. What issues would need to be considered before giving these local managers the authority that they are requesting?

Accepted Answer

The company should consider how well the

Question 18

Which of the following is an example of excessive influencing activities?

Accepted Answer

A)  Informing the manufacturing division of defects in a shipment. 
B)  Estimating the elasticity of demand for your firm's product. 
C)  Cancelling a meeting with a client to golf with your superiors. 
D)  Taking clients out to dinner. 
A)  Informing the manufacturing division of defects in a shipment. 
B)  Estimating the elasticity of demand for your firm's product. 
C)  Cancelling a meeting with a client to golf with your superiors. 
D)  Taking clients out to dinner.

Question 19

Jobs have at least two important dimensions:

Accepted Answer

A)  tasks and uncertainty. 
B)  tasks and decision authority. 
C)  uncertainty and decision control. 
D)  decision authority and decision control. 
A)  tasks and uncertainty. 
B)  tasks and decision authority. 
C)  uncertainty and decision control. 
D)  decision authority and decision control.

Question 20

Kevin Freeman is the head of a team developing plastic knee replacements. Each member of the team brings specialized knowledge to the innovation process. Kevin noticed that the specialist on bone/artificial materials compatibility is always late to meetings and contributes little. This an example of the:

Accepted Answer

A)  benefits of the use of dispersed knowledge. 
B)  costs of employee of buy-in. 
C)  costs of collective action problems. 
D)  problem of the free rider. 
A)  benefits of the use of dispersed knowledge. 
B)  costs of employee of buy-in. 
C)  costs of collective action problems. 
D)  problem of the free rider.

Firms grant decision rights to teams of employees for all of the following reasons except to:

What are some of the demerits of decentralization?

Empowerment may be a problem because:

Bob is given the right to make a decision. This is an example of:

The issue with centralization versus decentralization is:

Decision management is made up of:

A job in sales - such as a sales representative for an agricultural chemical company - usually represents:

The use of hierarchies is common in the modern corporation:

Kevin Freeman's artificial knee research team has discovered an improved materials handling procedure that reduces contamination of the product during assembly. The issue for the company is:

Which of the following is not a benefit to decentralization of corporate decision-making?

We say that a firm is vertically integrated if:

In addition to other factors, the increased use of technology and the reduced costs of information transfer from local office to corporate headquarters has:

Which one of the following is not a benefit of decentralization:

Under what conditions will decentralization be beneficial?

Which of the following is an example of excessive influencing activities?

Jobs have at least two important dimensions:

Introduction

Economists View of Behavior

Markets, Organizations, and the Role of Knowledge

Demand

Production and Cost

Market Structure

Pricing With Market Power

Economics of Strategy: Creating and Capturing Value

Economics of Strategy: Game Theory

Incentive Conflicts and Contracts

Organizational Architecture

Decision Rights: Bundling Tasks Into Jobs and Subunits

Attracting and Retaining Qualified Employees

Incentive Compensation

Individual Performance Evaluation

Divisional Performance Evaluation

Corporate Governance

Vertical Integration and Outsourcing

Leadership: Motivating Change Within Organizations

Understanding the Business Environment: The Economics of Regulation

Ethics and Organizational Architecture

Organizational Architecture and the Process of Management Innovation

Filters

Exam 12: Decision Rights: The Level of Empowerment

Firms grant decision rights to teams of employees for all of the following reasons except to:

What are some of the demerits of decentralization?

Empowerment may be a problem because:

Bob is given the right to make a decision. This is an example of:

The issue with centralization versus decentralization is:

Decision management is made up of:

A job in sales - such as a sales representative for an agricultural chemical company - usually represents:

The use of hierarchies is common in the modern corporation:

Kevin Freeman's artificial knee research team has discovered an improved materials handling procedure that reduces contamination of the product during assembly. The issue for the company is:

Which of the following is not a benefit to decentralization of corporate decision-making?

We say that a firm is vertically integrated if:

In addition to other factors, the increased use of technology and the reduced costs of information transfer from local office to corporate headquarters has:

Which one of the following is not a benefit of decentralization:

Under what conditions will decentralization be beneficial?

Which of the following is an example of excessive influencing activities?

Jobs have at least two important dimensions:

Introduction

Economists View of Behavior

Markets, Organizations, and the Role of Knowledge

Demand

Production and Cost

Market Structure

Pricing With Market Power

Economics of Strategy: Creating and Capturing Value

Economics of Strategy: Game Theory

Incentive Conflicts and Contracts

Organizational Architecture

Decision Rights: Bundling Tasks Into Jobs and Subunits

Attracting and Retaining Qualified Employees

Incentive Compensation

Individual Performance Evaluation

Divisional Performance Evaluation

Corporate Governance

Vertical Integration and Outsourcing

Leadership: Motivating Change Within Organizations

Understanding the Business Environment: The Economics of Regulation

Ethics and Organizational Architecture

Organizational Architecture and the Process of Management Innovation

Filters