Econ 308 midtrm 2-3
Terms
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- Name and Explain the 4 steps to decision making process.
- initiation- proposal of decision initiatives. ratification- choice of alternative decision initiatives implementation- execution of ratified decision initiative monitoring- measure performance of exectued decision and allocate rewards decision management- refers to initiation and implemenation and is executed at a lower level of the firm. decision control- refers to ratification and monitoring and is executed at a higher level of the firm. whenever there is principal-agent relationship, seperating decision management and decision control limits conflict of interest. in large corporations, decision management are done by managers while decision control is done by the board of directors, who in turn s monitored by large sharholders and takeover specialists. In some cases an empowered employee might have explicit rights to initaiate and implement decisions, but managers will still ratify and monitor the decisions. One potential benefit of limiting discretion in making decisioins is that it reduces rent-seeking cost in influencing deecisiions. collective decision-making, cyclical preference, voting rules, agenda manipulation, power of a committee chair and power of the purse. Edit Card Card FrontName and Explain the 4 steps to decision making process. Card Backinitiation- proposal of decision initiatives. ratification- choice of alternative decision initiatives implementation- execution of ratified decision initiative monitoring- measure performance of exectued decision and allocate rewards decision management- refers to initiation and implemenation and is executed at a lower level of the firm. decision control- refers to ratification and monitoring and is executed at a higher level of the firm. whenever there is principal-agent relationship, seperating decision management and decision control limits conflict of interest. in large corporations, decision management are done by managers while decision control is done by the board of directors, who in turn s monitored by large sharholders and takeover specialists. In some cases an empowered employee might have explicit rights to initaiate and implement decisions, but managers will still ratify and monitor the decisions. One potential benefit of limiting discretion in making decisioins is that it reduces rent-seeking cost in influencing deecisiions. collective decision-making, cyclical preference, voting rules, agenda manipulation, power of a committee chair and power of the purse.
- Name and explain the 4 structural forms of organization.
- unitary form u form- is to group jobs by functional specialty. multidivisional form m form- is to group jobs into a collection of business units based on product or geographical area. Matrix organization-has employess from different functional departments assigned to product or geographical area teams on temporarily basis, eg defense, construction and management consulting. Employees report to both a functional manager and a business unit manager. In-fights and rent seeking among functional groups are more intense. network organization-has an affiliation of independent subsidiaries that together enjoy economies of scale and scope but seperately avoid diseconomies of scale and scope for example a theme park, hotels, restaurants and transportation. EX; Edit Card Card FrontName and explain the 4 structural forms of organization. Card Backunitary form u form- is to group jobs by functional specialty. multidivisional form m form- is to group jobs into a collection of business units based on product or geographical area. Matrix organization-has employess from different functional departments assigned to product or geographical area teams on temporarily basis, eg defense, construction and management consulting. Employees report to both a functional manager and a business unit manager. In-fights and rent seeking among functional groups are more intense. network organization-has an affiliation of independent subsidiaries that together enjoy economies of scale and scope but seperately avoid diseconomies of scale and scope for example a theme park, hotels, restaurants and transportation. EX;
- name and explain the benefits and costs of u form organization.
- unitary form is to group jobs by functional specialty. Benefits- it promotes functional expertise -it incurs lower costs to recruit, retain and evaluate functional members. -there is lower costs of communicating and share results among members of the same functional speciality. -there is well defined promotion path for employees. costs- higher senior management costs of coordination functions -higher communicating costs across functional departments. -too much functional expertise and not overall customer satisfaction -in-fights among functional groups. u form organization works best in small firms with homogenous products and markets, and more stable technological environment. Edit Card Card Frontname and explain the benefits and costs of u form organization. Card Backunitary form is to group jobs by functional specialty. Benefits- it promotes functional expertise -it incurs lower costs to recruit, retain and evaluate functional members. -there is lower costs of communicating and share results among members of the same functional speciality. -there is well defined promotion path for employees. costs- higher senior management costs of coordination functions -higher communicating costs across functional departments. -too much functional expertise and not overall customer satisfaction -in-fights among functional groups. u form organization works best in small firms with homogenous products and markets, and more stable technological environment.
- objective performance evaluation
- leads employees to exert effort on measurable performance attributes evaluation and de-emphasize on non measurable performance attriutes, subjective performance evaluation is supplemented to yeild a comprehensive performance evaluation. Edit Card Card Frontobjective performance evaluation Card Backleads employees to exert effort on measurable performance attributes evaluation and de-emphasize on non measurable performance attriutes, subjective performance evaluation is supplemented to yeild a comprehensive performance evaluation.
- opportunism
- is the non-or counter productive activities engaged by employes to improbe their performance evaluation leading to gaming and horizon problem. Edit Card Card Frontopportunism Card Backis the non-or counter productive activities engaged by employes to improbe their performance evaluation leading to gaming and horizon problem.
- problems of subjective performance evaluation
- -shirking among evaluators -rent seeking to influence decision Edit Card Card Frontproblems of subjective performance evaluation Card Back-shirking among evaluators -rent seeking to influence decision