Exam 1: Introduction

Enron was clearly a company riddled with fraud and excess; its conduct drove it into bankruptcy. The text argues that individual behavior was not at the core of Enron's problems. What were the problems with this corporation from an organizational architecture point of view?

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Question 1

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Enron delegated an extraordinary amount of decision rights to lower-level employees. However, Enron lacked effective oversight and review of decisions made by these employees. The performance evaluations for the internal risk management group were based in part on the recommendations of the individuals making the deals that risk management was suppose to monitor. The legal staff was decentralized to individual business units making them too eager to ensure that their unit met performance targets. Finally, Enron offered high-powered incentives tied to short term performance measured by near-term earning growth. This encouraged excessive risk taking.

The term Darwinism is important because it indicates:

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Question 2

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"Subprime mortgages" refer to:

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Question 3

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What are some of the ways in which risky borrowers cheated on housing loans?

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Question 4

How can good management practices be useful in a global economy?

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Question 5

Recent research on CEO behavior tells us that CEOs generally:

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Question 6

The example of Enron shows that:

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Question 7

In the textbook, there is an example of a software firm in which the managers provided a financial incentive to get rid of software bugs. The result was that software writers added more bugs into the software. This example shows that:

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Question 8

Barings Bank failed because of:

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Question 9

The key to organizational architecture is:

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Question 10

Fama and Jensen suggest that "the form of organization that survives in an activity is one that delivers the product demanded by customers at the lowest price while covering costs." This is an example of:

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Question 11

Is there a relationship between a CEO's retirement and the R&D expenses in a firm?

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Question 12

The authors argue that successful corporations assign decision rights in ways that:

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Question 13

Benchmarking may be a problem if:

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Question 14

Many economics texts discuss the question "Which markets should a firm enter?" This text focuses on the following question:

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Question 15

The Survival of the Fittest tells us:

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Question 16

Economic Darwinism is when:

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Question 17

If the technology, the nature of competition, or the regulatory environment change in an industry, then:

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Question 18

What are three components of organizational architecture? Which one is most important to the success of the firm?

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Question 19

From Jerome Kerviel's actions in Societe Generale, we realize that in a business organization, managers may turn a blind eye to certain "red flags" from the system if:

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Question 20

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Exam 1: Introduction

Enron was clearly a company riddled with fraud and excess; its conduct drove it into bankruptcy. The text argues that individual behavior was not at the core of Enron's problems. What were the problems with this corporation from an organizational architecture point of view?

The term Darwinism is important because it indicates:

"Subprime mortgages" refer to:

What are some of the ways in which risky borrowers cheated on housing loans?

How can good management practices be useful in a global economy?

Recent research on CEO behavior tells us that CEOs generally:

The example of Enron shows that:

In the textbook, there is an example of a software firm in which the managers provided a financial incentive to get rid of software bugs. The result was that software writers added more bugs into the software. This example shows that:

Barings Bank failed because of:

The key to organizational architecture is:

Fama and Jensen suggest that "the form of organization that survives in an activity is one that delivers the product demanded by customers at the lowest price while covering costs." This is an example of:

Is there a relationship between a CEO's retirement and the R&D expenses in a firm?

The authors argue that successful corporations assign decision rights in ways that:

Benchmarking may be a problem if:

Many economics texts discuss the question "Which markets should a firm enter?" This text focuses on the following question:

The Survival of the Fittest tells us:

Economic Darwinism is when:

If the technology, the nature of competition, or the regulatory environment change in an industry, then:

What are three components of organizational architecture? Which one is most important to the success of the firm?

From Jerome Kerviel's actions in Societe Generale, we realize that in a business organization, managers may turn a blind eye to certain "red flags" from the system if:

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: 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

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