1. A household-products manufacturing firm was required to examine its organizational architecture in order to survive in the market. The three aspects of its organization that it looked into are

A. decision rights, rewards, and technology.

B. government regulation, technology, and decision rights.

C. government regulation, technology, and markets.

D. decision rights, rewards, and evaluation systems.

_____ 2. One of the problems with making all the decisions at the top of a business organization is the costliness of:

A. specific information.

B. general information.

C. advanced technology.

D. market power.

_____ 3. 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 meant to:

A. effectively uses local general knowledge.

B. encourage knowledge transfer from corporate headquarters to local stores.

C. encourage risk taking by local stores.

D. effectively use local specific knowledge.

_____ 4. Competitive markets usually promote the efficient use of resources. This is because:

A. resource owners bear the wealth effects of their decisions.

B. managers always have the proper incentives to make decisions.

C. consumers price makers

D. markets usually make equitable choices first.

_____ 5. A significant feature of the price system in a market economy is that the architecture:

A. is created spontaneously.

B. is created by the government.

C. promotes skewed distribution of wealth.

D. promotes a system of controls on the employees of an organization.

_____ 6. Within corporations, there are _______ systems that motivate individuals and teams to make the most efficient decisions on products sales.

A. automatic administrative

B. automatic market-driven

C. no automatic administrative

D. no automatic market-driven

_____ 7. The movement of goods and resources within a corporation is done on the basis of:

A. market allocation.

B. administrative decisions.

C. technological innovation.

D. government regulation.

_____ 8. If a manager who does not own a company is allowed to make decisions for the company, then:

A. the decisions will usually be effective.

B. inappropriate decisions will be taken.

C. a control system of rewards and evaluation must be set up.

D. the manager usually assumes the same position as the owner.

_____ 9. Fred Powell, the CEO of Tralee, is in a quandary. He wants to bring a new lamp to the market that is based on fuel technology. He just does not understand the technology involved, but he has several engineers who have spent a lot of time investigating the issue. Powell needs to:

A. decentralizes decision making to people with specific knowledge.

B. hire outside experts to question his engineers about fuel cells.

C. just make a decision so he can beat the competition in the market.

D. retires and replaces himself with an engineer.

_____ 10. A disadvantage associated with decentralizing the decision-making process in an organization is that:

A. the CEO is likely to make suboptimal decisions.

B. the cost of transferring information between the CEO and other decision makers can be high.

C. it makes the three legs of the architectural stool of an organization inconsistent with each other.

D. it prevents firms from benchmarking other firms to determine value-enhancing policies.

_____ 11. Kevin Freeman is the head of a team developing plastic knee replacements. Each member of the team brings specialized knowledge to the innovation process. Kevin noticed that the specialist on bone and artificial materials compatibility is always late to meetings and contributes little. This is an example of the:

A. benefits of the use of dispersed specific knowledge.

B. costs of employee buy-in.

C. costs of collective-action problems.

D. free-rider problem.

_____ 12. In the case of team decision making, the size of the team is optimal when:

A. there are five members in the team.

B. the number of team members exceeds ten.

C. the additional cost of adding a new member equals the incremental benefits.

D. the additional cost of adding a new member is less than the incremental benefits.

_____ 13. If decision makers do not bear the major wealth effects of their decisions, then:

A. the same person in the management structure must hold decision management and 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.

_____ 14. Decision control is made up of:

A. initiation and ratification of projects.

B. implementation and monitoring of projects.

C. ratification and monitoring of projects.

D. initiation and implementation of projects.

_____ 15. Decision management is made up of:

A. initiation and ratification of projects.

B. implementation and monitoring of projects.

C. ratification and monitoring of projects.

D. initiation and implementation of projects.

_____ 16. Each year, most U.S. companies bring a Certified Public Accountant (CPA) firm to audit their books. This is an example of:

A. a lack of trust between the companies and the managers.

B. separation of decision management and decision control.

C. the impact of influence costs.

D. the benefits of decentralization or outsourcing.

_____ 17. The use of hierarchies is common in modern corporations:

A. because of the principle of comparative advantage.

B. because of the principle of separation of decision management and decision control.

C. to avoid collective-action problems.

D. to enhance employee buy-in.

_____ 18. Empowerment may be a problem because:

A. managers are never eager to empower anyone else except themselves.

B. managers are usually ambiguous when it comes to empowerment.

C. workers are always eager to empower themselves even if they are unqualified.

D. managers are usually very eager to empower those who are least qualified.

_____ 19. An empowered employee has:

A. explicit rights to initiate but not implement any decision.

B. explicit rights to initiate and implement any decision, subject to the manager's ratification and monitoring.

C. explicit rights to initiate and implement any decision, without the manager's ratification and monitoring.

D. explicit rights to implement but not initiate any decision.

_____ 20. Boundary setting refers to:

A. managers requesting permission to ratify every decision made by an empowered worker.

B. managers pre-ratifying certain decisions made by empowered workers within a certain range, while still maintaining supervisory control.

C. employees seeking approval for every decision from managers.

D. workers setting up rules of empowerment that might influence their decision-making authority.

Answer rating: 100% (QA)

1 D decision rights rewards and evaluation systems 2 A specific information 3 D effectively use loca... View the full answer