Question 1

If D represents the level of decentralization of corporate decision-making, then Benefits = B*D and Costs = A*D + C*D2. The optimal level of decentralization occurs where:

Accepted Answer

A)   Benefits = Costs
B)   Costs are equal to zero
C)   D = BD - Ad - CD2
D)   D = (B-
A)  /2CE) B) and C)
F) A) and D)

Question 2

If an employee makes a point of stopping each morning in his manager's office to detail the positive outcomes yesterday's work, this is an example of:

Accepted Answer

A)   project initiation.
B)   influence costs.
C)   project monitoring.
D)   decentralization of decision-making.E) A) and D)
F) B) and C)

Question 3

If decision makers do not bear the major wealth effects of decisions, then:

Accepted Answer

A)   the same person in the management structure must hold decision management and decision control.
B)   separate decision makers must hold decision management and decision control.
C)   decision management is clearly integrated with decision control.
D)   the same managers hold initiation and ratification of decisions.E) A) and B)
F) A) and C)

Question 4

Macrosoft is implementing a new research and design shop to integrate PC manufacturers' requirements for new computer software with Macrosoft's operating system. The process of integration usually requires five different kinds of software modification tasks, plus decisions about integrating these modifications. Discuss the problems of designing the new jobs in this research and design shop.

Accepted Answer

Macrosoft may be considering whether to ...

Question 5

Boundary setting refers to:

Accepted Answer

A)   managers requesting permission to ratify every decision made by an empowered worker.
B)   managers preratifying certain decisions made by empowered workers within a certain range, while still maintaining supervisory control.
C)   managers preratifying certain decisions made by empowered workers within a certain range, while still maintaining supervisory control
D)   workers setting up rules of empowerment that might influence their decision making authority.E) A) and B)
F) A) and C)

Question 6

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

Accepted Answer

A)   Incentive problems
B)   Coordination costs and failures
C)   Less effective use of central information
D)   More effective use of local knowledgeE) B) and C)
F) B) and D)

Question 7

Decision control 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.E) B) and C)
F) C) and D)

Question 8

Centralized decision-making is most commonly found in:

Accepted Answer

A)   firms that are expanding into other geographical areas.
B)   stable industrial environments.
C)   emerging economies and industries.
D)   highly vertically integrated firms.E) All of the above
F) None of the above

Question 9

You are assigned a group project for the class, and you will be graded as a group, and your individual grade will be decided on the group's performance relative to other groups. Will you like this arrangement?

Accepted Answer

Clearly it depends if you are lazy or mo...

Question 10

Each year, most US companies bring a CPA firm to audit their books. This is an example of:

Accepted Answer

A)   how most companies do not trust their managers.
B)   separation of decision management and decision control.
C)   the impact of influence costs.
D)   the benefits of decentralization or outsourcing.E) C) and D)
F) None of the above

Question 11

An empowered employee has:

Accepted Answer

A)   explicit rights to initiate but not implement any decision.
B)   explicit rights to initiate and implement any decision, subject to manager's ratification and monitoring.
C)   explicit rights to initiate and implement any decision, sans manager's ratification and monitoring.
D)   explicit rights to implement but not initiate any decision.E) A) and C)
F) None of the above

Question 12

If D represents the level of decentralization of corporate decision-making, then Benefits = B*D and Costs = A*D + C*D2. The optimal level of decentralization occurs where the:

Accepted Answer

A)   horizontal distance between benefits and costs is greatest.
B)   vertical distance between benefits and costs is greatest.
C)   sum of the squares of the distance between benefits and costs is minimized.
D)   level of benefits is greatest.E) None of the above
F) All of the above

Question 13

Plain Truth Adverting employs KPR, a large accounting firm, to audit its books each year. This involves considerable expense for the advertising firm, since its sales account managers are very independent and maintain separate record keeping systems. Should the CEO at Plain Truth cancel the audit and rely on a brief year-end summary from each sales account manager? Why?

Accepted Answer

The audit should probably not be cancell...

Question 14

What are influence costs, and why do they inhibit efficient organizational design?

Accepted Answer

It is usually better to allow employees ...

Question 15

Incentive problems are usually:

Accepted Answer

A)   larger, the further up the organization the decision rights are placed.
B)   larger, the further down the organization the decision rights are placed.
C)   smaller, the further down the organization the decision rights are placed.
D)   larger regardless of where the decision rights are placed.E) A) and B)
F) None of the above

Question 16

Kevin Freeman is the head of a team developing plastic knee replacements. Each member of the team brings specialized knowledge to the innovation process. Without both engineers and materials specialists, the project could not be successful. This an example of the:

Accepted Answer

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

Question 17

Decentralizing decision rights marries authority with local knowledge. This would seem to be a good thing, but a problem that may arise is that:

Accepted Answer

A)   local management may conserve central management's time and effort.
B)   local knowledge may allow local managers to tailor prices and services to local needs
C)   lack of local incentives may mean that local managers do not work to maximize firm value.
D)   local managers may have too strong a corporate identification.E) B) and C)
F) C) and D)

Exam 12: Decision Rights: The Level of Empowerment

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

Correct Answer
verified

You are assigned a group project for the class, and you will be graded as a group, and your individual grade will be decided on the group's performance relative to other groups. Will you like this arrangement?

Correct Answer
verified
Clearly it depends if you are lazy or mo...
View Answer

Correct Answer
verified
The audit should probably not be cancell...
View Answer

If decision makers do not bear the major wealth effects of decisions, then:

Correct Answer
verified

Incentive problems are usually:

Correct Answer
verified

If D represents the level of decentralization of corporate decision-making, then Benefits = BD and Costs = AD + C*D². The optimal level of decentralization occurs where:

Correct Answer
verified

Centralized decision-making is most commonly found in:

Correct Answer
verified

If D represents the level of decentralization of corporate decision-making, then Benefits = BD and Costs = AD + C*D². The optimal level of decentralization occurs where the:

Correct Answer
verified

Kevin Freeman is the head of a team developing plastic knee replacements. Each member of the team brings specialized knowledge to the innovation process. Without both engineers and materials specialists, the project could not be successful. This an example of the:

Correct Answer
verified

Correct Answer
verified
Macrosoft may be considering whether to ...
View Answer

If an employee makes a point of stopping each morning in his manager's office to detail the positive outcomes yesterday's work, this is an example of:

Correct Answer
verified

What are influence costs, and why do they inhibit efficient organizational design?

Correct Answer
verified
It is usually better to allow employees ...
View Answer

Each year, most US companies bring a CPA firm to audit their books. This is an example of:

Correct Answer
verified

Decision control is made up of:

Correct Answer
verified

Decentralizing decision rights marries authority with local knowledge. This would seem to be a good thing, but a problem that may arise is that:

Correct Answer
verified

An empowered employee has:

Correct Answer
verified

Boundary setting refers to:

Correct Answer
verified

Exam 12: Decision Rights: The Level of Empowerment

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

Correct AnswerverifiedShow Answer

You are assigned a group project for the class, and you will be graded as a group, and your individual grade will be decided on the group's performance relative to other groups. Will you like this arrangement?

Correct AnswerverifiedClearly it depends if you are lazy or mo...View AnswerShow Answer

Correct AnswerverifiedThe audit should probably not be cancell...View AnswerShow Answer

If decision makers do not bear the major wealth effects of decisions, then:

Correct AnswerverifiedShow Answer

Incentive problems are usually:

Correct AnswerverifiedShow Answer

If D represents the level of decentralization of corporate decision-making, then Benefits = B*D and Costs = A*D + C*D2. The optimal level of decentralization occurs where:

Correct AnswerverifiedShow Answer

Centralized decision-making is most commonly found in:

Correct AnswerverifiedShow Answer

If D represents the level of decentralization of corporate decision-making, then Benefits = B*D and Costs = A*D + C*D2. The optimal level of decentralization occurs where the:

Correct AnswerverifiedShow Answer

Kevin Freeman is the head of a team developing plastic knee replacements. Each member of the team brings specialized knowledge to the innovation process. Without both engineers and materials specialists, the project could not be successful. This an example of the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedMacrosoft may be considering whether to ...View AnswerShow Answer

If an employee makes a point of stopping each morning in his manager's office to detail the positive outcomes yesterday's work, this is an example of:

Correct AnswerverifiedShow Answer

What are influence costs, and why do they inhibit efficient organizational design?

Correct AnswerverifiedIt is usually better to allow employees ...View AnswerShow Answer

Each year, most US companies bring a CPA firm to audit their books. This is an example of:

Correct AnswerverifiedShow Answer

Decision control is made up of:

Correct AnswerverifiedShow Answer

Decentralizing decision rights marries authority with local knowledge. This would seem to be a good thing, but a problem that may arise is that:

Correct AnswerverifiedShow Answer

An empowered employee has:

Correct AnswerverifiedShow Answer

Boundary setting refers to:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Clearly it depends if you are lazy or mo...
View Answer

Correct Answer
verified
The audit should probably not be cancell...
View Answer

Correct Answer
verified

Correct Answer
verified

If D represents the level of decentralization of corporate decision-making, then Benefits = BD and Costs = AD + C*D². The optimal level of decentralization occurs where:

Correct Answer
verified

Correct Answer
verified

If D represents the level of decentralization of corporate decision-making, then Benefits = BD and Costs = AD + C*D². The optimal level of decentralization occurs where the:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Macrosoft may be considering whether to ...
View Answer

Correct Answer
verified

Correct Answer
verified
It is usually better to allow employees ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified