It has been suggested that large, tall hierarchies will predominate in physical capital intensive industries, and these will typically have seniority-based promotion policies. By contrast, flat hierarchies will be seen in human capital intensive industries. These will have up-or-out promotion systems, where experienced managers either become owners or are fired. Can you provide a basis for this suggestion or against the suggestion? Explain
Answer to relevant QuestionsHere is a view on organizational changes. When Ben and Jerry decided to step down as managers of their own company, they announced that the new CEO would not earn more than 10 times the lowest paid employee. What do you think was the result of their policy?Could rent seeking on the part of the CEO influence the CEO’s compensation? Evaluate the following argument. Explain why predatory pricing hardly works in the real world.Two firms are involved in developing a new technology that will allow consumers to provide the most incredibly clear picture yet devised on all video sources. Given the risks, compatibility of the technologies is very ...
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