Question 1

Benchmarking means

Accepted Answer

A) blind copying from others. 
B) copying from the best so as to become better. 
C) looking at yourself and telling others what to do. 
D) looking at yourself and telling yourself you are the greatest. 
A) blind copying from others. 
B) copying from the best so as to become better. 
C) looking at yourself and telling others what to do. 
D) looking at yourself and telling yourself you are the greatest. B

Question 2

The principle "survival of the fittest" tells us that

Accepted Answer

A) only the most innovative and adaptive firms are likely to survive competition. 
B) only the most innovative and adaptive firms are likely to attract more competition. 
C) only the least innovative and adaptive firms are likely to survive competition. 
D) only the most innovative and adaptive firms are likely to migrate to other products. 
A) only the most innovative and adaptive firms are likely to survive competition. 
B) only the most innovative and adaptive firms are likely to attract more competition. 
C) only the least innovative and adaptive firms are likely to survive competition. 
D) only the most innovative and adaptive firms are likely to migrate to other products. B

Question 3

The example of Enron shows that

Accepted Answer

A) selection of people is the key to organizational success or failure. 
B) large incentives play an important role in motivating people within a corporation. 
C) the success of a business is possible in a regulatory environment. 
D) organizational structure is extremely important in business success. 
A) selection of people is the key to organizational success or failure. 
B) large incentives play an important role in motivating people within a corporation. 
C) the success of a business is possible in a regulatory environment. 
D) organizational structure is extremely important in business success. D

Question 4

"Subprime mortgages" refer to

Accepted Answer

A) interest rates that are over and above the prime rate to risky borrowers. 
B) mortgages made to credit-worthy borrowers at low interest rates. 
C) mortgages made to borrowers who do not usually qualify for loans. 
D) mortgage brokers making huge commissions on volume. 
A) interest rates that are over and above the prime rate to risky borrowers. 
B) mortgages made to credit-worthy borrowers at low interest rates. 
C) mortgages made to borrowers who do not usually qualify for loans. 
D) mortgage brokers making huge commissions on volume.

Question 5

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

Accepted Answer

A) the appropriate organizational architecture will change too. 
B) a good organizational architecture will shut down. 
C) the organizational architecture will be able to restore the former market environment. 
D) the industry will increase production. 
A) the appropriate organizational architecture will change too. 
B) a good organizational architecture will shut down. 
C) the organizational architecture will be able to restore the former market environment. 
D) the industry will increase production.

Question 6

Benchmarking may be a problem if

Accepted Answer

A) the current architecture is relatively unstable and proposed changes add huge benefits. 
B) the current architecture is relatively stable and proposed changes add huge benefits. 
C) the current architecture is relatively unstable and proposed changes add little benefits. 
D) the current architecture is relatively stable and proposed changes add little benefits. 
A) the current architecture is relatively unstable and proposed changes add huge benefits. 
B) the current architecture is relatively stable and proposed changes add huge benefits. 
C) the current architecture is relatively unstable and proposed changes add little benefits. 
D) the current architecture is relatively stable and proposed changes add little benefits.

Question 7

Bloomberg Business sums up the failure of Enron to

Accepted Answer

A) September 11,2001. 
B) flawed organizational design. 
C) too much debt. 
D) risky projects in India and the oil price hikes. 
A) September 11,2001. 
B) flawed organizational design. 
C) too much debt. 
D) risky projects in India and the oil price hikes.

Question 8

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

Accepted Answer

A) financial incentives should never be used. 
B) most employees are corrupt. 
C) incentives can create perverse effects. 
D) high-tech firms are unique. 
A) financial incentives should never be used. 
B) most employees are corrupt. 
C) incentives can create perverse effects. 
D) high-tech firms are unique.

Question 9

Economics provides a theory to explain

Accepted Answer

A) how a successful business can be started. 
B) how managers can cheat and get away with it. 
C) how people make choices. 
D) how businesses compete in the market. 
A) how a successful business can be started. 
B) how managers can cheat and get away with it. 
C) how people make choices. 
D) how businesses compete in the market.

Question 10

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

Accepted Answer

There is.In many instances,a CEO reduces

Question 11

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

Accepted Answer

A) market and organizational efficiency. 
B) market and organizational equity. 
C) economic benchmarking. 
D) defective organizational architecture. 
A) market and organizational efficiency. 
B) market and organizational equity. 
C) economic benchmarking. 
D) defective organizational architecture.

Question 12

In order to survive in a market,a firm needs to

Accepted Answer

A) make extensive use of available technology. 
B) hire more capital and less labor. 
C) produce a product demanded by consumers at the lowest possible price while covering costs. 
D) charge higher prices for its products than its rivals and revise prices upward periodically. 
A) make extensive use of available technology. 
B) hire more capital and less labor. 
C) produce a product demanded by consumers at the lowest possible price while covering costs. 
D) charge higher prices for its products than its rivals and revise prices upward periodically.

Question 13

Recent research on CEO behavior tells us that CEOs generally

Accepted Answer

A) increase their firm's R&D expenditure so as to boost earnings long before they retire. 
B) reduce their firm's R&D expenditure so as to boost earnings long before they retire. 
C) reduce their firm's R&D expenditure so as to boost earnings just before they retire. 
D) increase their firm's R&D expenditure so as to boost earnings just before they retire. 
A) increase their firm's R&D expenditure so as to boost earnings long before they retire. 
B) reduce their firm's R&D expenditure so as to boost earnings long before they retire. 
C) reduce their firm's R&D expenditure so as to boost earnings just before they retire. 
D) increase their firm's R&D expenditure so as to boost earnings just before they retire.

Question 14

Which of the following is a benefit of a competitive market structure?

Accepted Answer

A) efficient decision making 
B) a low tax rate 
C) high cost of production 
D) high market power 
A) efficient decision making 
B) a low tax rate 
C) high cost of production 
D) high market power

Question 15

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

Accepted Answer

Enron delegated an extraordinary amount

Question 16

Explain why the top executives of Société Générale are more likely to be blamed than Jérôme Kerviel.

Accepted Answer

Kerviel had been playing the markets for

Question 17

Identify a critical aspect of corporate organization.

Accepted Answer

A) the assignment of decision rights within a company 
B) the cost structure of the firm 
C) the pricing strategies of the rival firms 
D) the capita to labor ratio 
A) the assignment of decision rights within a company 
B) the cost structure of the firm 
C) the pricing strategies of the rival firms 
D) the capita to labor ratio

Question 18

Which of the following is true of standard economic analysis?

Accepted Answer

A) It characterizes a firm as a black box that transforms inputs to outputs. 
B) It focuses on the internal architecture of a firm. 
C) It applies basic economic tools to examine the effects of managerial decisions. 
D) It characterizes a firm as an organization that generates economic growth. 
A) It characterizes a firm as a black box that transforms inputs to outputs. 
B) It focuses on the internal architecture of a firm. 
C) It applies basic economic tools to examine the effects of managerial decisions. 
D) It characterizes a firm as an organization that generates economic growth.

Question 19

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

Accepted Answer

A) the managers themselves conduct certain illegal activities. 
B) the managers know that at some point these illegal activities will fail. 
C) the managers believe that no worker will unnecessarily expose himself or herself. 
D) the managers embrace risk taking as long as it benefits the company. 
A) the managers themselves conduct certain illegal activities. 
B) the managers know that at some point these illegal activities will fail. 
C) the managers believe that no worker will unnecessarily expose himself or herself. 
D) the managers embrace risk taking as long as it benefits the company.

Question 20

DHL,a successful European company,is attempting to overcome various legal problems in order to enter the U.S.market of overnight package delivery.Its two major competitors would be FedEx and UPS.As DHL looks to set up a U.S.subsidiary,it wishes to benchmark its organizational architecture.What should it do?

Accepted Answer

DHL should realize that a successful org

Exam 1: Introduction

Benchmarking means

The principle "survival of the fittest" tells us that

The example of Enron shows that

"Subprime mortgages" refer to

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

Benchmarking may be a problem if

Bloomberg Business sums up the failure of Enron to

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

Economics provides a theory to explain

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

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

In order to survive in a market,a firm needs to

Recent research on CEO behavior tells us that CEOs generally

Which of the following is a benefit of a competitive market structure?

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

Explain why the top executives of Société Générale are more likely to be blamed than Jérôme Kerviel.

Identify a critical aspect of corporate organization.

Which of the following is true of standard economic analysis?

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

Economists View of Behavior

Exchange and Markets

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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