Question 1

When Eastman Kodak adopted the Management Annual Performance Plan (MAPP) in 1987, it replaced part of its employees' salaries with bonuses. This system:

Accepted Answer

A)  had to fail. 
B)  introduced a new reward and performance evaluation system. 
C)  is required for all companies with rational managers. 
D)  is an inherent part of a corporate culture. 
A)  had to fail. 
B)  introduced a new reward and performance evaluation system. 
C)  is required for all companies with rational managers. 
D)  is an inherent part of a corporate culture. B

Question 2

If a manager cannot use his management team to deliver a product profitability to the marketplace, a strong solution might be for the Board of Directors:

Accepted Answer

A)  to hire a therapist for the manager. 
B)  to let the manager have more time to figure things out. 
C)  to fire the manager and reorganize the company. 
D)  eliminate incentive bonuses for the current management. 
A)  to hire a therapist for the manager. 
B)  to let the manager have more time to figure things out. 
C)  to fire the manager and reorganize the company. 
D)  eliminate incentive bonuses for the current management. C

Question 3

How is the architecture within firms usually set up?

Accepted Answer

Organization design is created by executives through explicit and implicit contracts. The senior management sets up policies regarding decision rights of the agents in the firm. Managers must also develop control systems which enables proper performance evaluation. CEOs are also decision makers and they can design alternative ways to obtain information, delegation being the most common. Thus, a firm can be thought of as a layer of management, where each layer is responsible for optimal information acquisition and distribution.

Question 4

Organizational architecture varies from firm to firm. The three big external (exogenous) determinants of a firm's administrative structure are:

Accepted Answer

A)  decision rights, rewards, and technology. 
B)  government regulation, technology and decision rights. 
C)  government regulation, technology and markets. 
D)  decision rights, rewards, evaluation systems. 
A)  decision rights, rewards, and technology. 
B)  government regulation, technology and decision rights. 
C)  government regulation, technology and markets. 
D)  decision rights, rewards, evaluation systems.

Question 5

W. Edward Deming - the quality control expert - has hinted that incentive pay is actually counter-productive. Economic analysis would indicate enhancing corporate culture and incentive rewards plans are:

Accepted Answer

A)  substitutes for each other. 
B)  complements for each other. 
C)  the sources of all inefficiencies in modern business. 
D)  convex functions of the technology principle. 
A)  substitutes for each other. 
B)  complements for each other. 
C)  the sources of all inefficiencies in modern business. 
D)  convex functions of the technology principle.

Question 6

Are organizational changes always needed?

Accepted Answer

Not necessarily. Any organizational chan

Question 7

If a corporation compares its compensation and performance evaluation systems to it best competitors, it has engaged in:

Accepted Answer

A)  plagiarism. 
B)  patent infringement. 
C)  benchmarking. 
D)  specific knowledge enhancement. 
A)  plagiarism. 
B)  patent infringement. 
C)  benchmarking. 
D)  specific knowledge enhancement.

Question 8

One important lesson to keep in mind during benchmarking is:

Accepted Answer

A)  benchmarking is always a value adding strategy. 
B)  different architectures are appropriate for different environments. 
C)  different architectures are basically the same for benchmarking purposes. 
D)  benchmarking is possible only if all environments match. 
A)  benchmarking is always a value adding strategy. 
B)  different architectures are appropriate for different environments. 
C)  different architectures are basically the same for benchmarking purposes. 
D)  benchmarking is possible only if all environments match.

Question 9

Economic theory would tend to imply that a mature industry without significant technological change will tend to have firms with similar structures, similar reward structures, and similar performance systems. Would the power of the marketplace be important in this trend?

Accepted Answer

The correlation between market structure

Question 10

One mechanism to replace poor management is:

Accepted Answer

A)  fire the low level workers who are most of the time indolent. 
B)  fire the union bosses who create an environment of mistrust. 
C)  tender offers and mergers. 
D)  pay more to the senior management since they deserve it. 
A)  fire the low level workers who are most of the time indolent. 
B)  fire the union bosses who create an environment of mistrust. 
C)  tender offers and mergers. 
D)  pay more to the senior management since they deserve it.

Question 11

A household products firm was required to examine its organizational architecture in order to survive. What three aspects of its organization did it look at?

Accepted Answer

A)  Decision rights, rewards, and technology. 
B)  Government regulation, technology and decision rights. 
C)  Government regulation, technology and markets. 
D)  Decision rights, rewards, evaluation systems. 
A)  Decision rights, rewards, and technology. 
B)  Government regulation, technology and decision rights. 
C)  Government regulation, technology and markets. 
D)  Decision rights, rewards, evaluation systems.

Question 12

What is corporate culture?

Accepted Answer

Corporate culture usually refers to the

Question 13

FedEx employees use the motto "Absolutely, Positively" to express their commitment to their customers. What should be the attitude of someone who studies economics toward this sort of company ritual?

Accepted Answer

Such symbols of corporate culture can pr

Question 14

J.C. Penney found that its headquarters staff did not understand regional fashion trends. Consequently, the company invested in TV communications technology that allowed New York buyers to communicate with local store managers. This communication was set to effectively use:

Accepted Answer

A)  local general knowledge. 
B)  corporate headquarters knowledge base transfer to local stores. 
C)  risk taking by local stores. 
D)  local specific knowledge. 
A)  local general knowledge. 
B)  corporate headquarters knowledge base transfer to local stores. 
C)  risk taking by local stores. 
D)  local specific knowledge.

Question 15

The movement of goods and resources within the corporation is done by:

Accepted Answer

A)  market allocation. 
B)  administrative decisions. 
C)  technological importance. 
D)  government regulation. 
A)  market allocation. 
B)  administrative decisions. 
C)  technological importance. 
D)  government regulation.

Question 16

One of problems with making all the decisions at the top of a business organization is costliness of:

Accepted Answer

A)  specific information. 
B)  general information. 
C)  advanced technology. 
D)  market power. 
A)  specific information. 
B)  general information. 
C)  advanced technology. 
D)  market power.

Question 17

One of the following is an important element of corporate culture:

Accepted Answer

A)  establish dress code and political correctness in the work place. 
B)  establish social rituals and voices within an organization. 
C)  establish expectations. 
D)  establish female participation in decisions. 
A)  establish dress code and political correctness in the work place. 
B)  establish social rituals and voices within an organization. 
C)  establish expectations. 
D)  establish female participation in decisions.

Question 18

The three legs of the organizational stool are reward systems, performance evaluation systems, and:

Accepted Answer

A)  influence costs. 
B)  decentralization. 
C)  decision rights. 
D)  market technology. 
A)  influence costs. 
B)  decentralization. 
C)  decision rights. 
D)  market technology.

Question 19

Sidney Featherstone of TIP, Inc. is owner and CEO of the company. He has made the company successful through his decision making over the years. This year he decided to retire to Costa Rica. He does not intend to change any aspects of decision making, rewards or performance evaluation in TIP, Inc. What will happen to TIP? Why?

Accepted Answer

It will perform poorly, at least in the

Question 20

Describe the three aspects of organizational architecture. Which one is the most important?

Accepted Answer

The three components - assignment of dec

Exam 11: Organizational Architecture

When Eastman Kodak adopted the Management Annual Performance Plan (MAPP) in 1987, it replaced part of its employees' salaries with bonuses. This system:

If a manager cannot use his management team to deliver a product profitability to the marketplace, a strong solution might be for the Board of Directors:

How is the architecture within firms usually set up?

Organizational architecture varies from firm to firm. The three big external (exogenous) determinants of a firm's administrative structure are:

W. Edward Deming - the quality control expert - has hinted that incentive pay is actually counter-productive. Economic analysis would indicate enhancing corporate culture and incentive rewards plans are:

Are organizational changes always needed?

If a corporation compares its compensation and performance evaluation systems to it best competitors, it has engaged in:

One important lesson to keep in mind during benchmarking is:

Economic theory would tend to imply that a mature industry without significant technological change will tend to have firms with similar structures, similar reward structures, and similar performance systems. Would the power of the marketplace be important in this trend?

One mechanism to replace poor management is:

A household products firm was required to examine its organizational architecture in order to survive. What three aspects of its organization did it look at?

What is corporate culture?

FedEx employees use the motto "Absolutely, Positively" to express their commitment to their customers. What should be the attitude of someone who studies economics toward this sort of company ritual?

J.C. Penney found that its headquarters staff did not understand regional fashion trends. Consequently, the company invested in TV communications technology that allowed New York buyers to communicate with local store managers. This communication was set to effectively use:

The movement of goods and resources within the corporation is done by:

One of problems with making all the decisions at the top of a business organization is costliness of:

One of the following is an important element of corporate culture:

The three legs of the organizational stool are reward systems, performance evaluation systems, and:

Describe the three aspects of organizational architecture. Which one is the most important?

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

Decision Rights: The Level of Empowerment

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