BSZ_IM_Ch13_4e - Managerial Economics and Organizational...

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Managerial Economics and Organizational Architecture Instructor’s Manual Part 1: Chapter Overview and Solutions Chapter 13: Page 1 CHAPTER 13 D ECISION R IGHTS : B UNDLING T ASKS INTO J OBS AND S UBUNITS This chapter is the second of two on the assignment of decision rights. It analyzes the bundling of tasks into jobs and jobs into the basic subunits of the firm. It discusses recent trends in the assignment of decision rights and provides a short case study. The appendix presents a game-theoretic example of some of the issues that arise in coordinating functional managers. C HAPTER O UTLINE B UNDLING T ASKS INTO J OBS Specialized versus Broad Task Assignment Productive Bundling of Tasks B UNDLING OF J OBS INTO S UBUNITS Grouping Jobs by Function Grouping Jobs by Product or Geography Trade-offs between Functional and Product or Geographic Subunits Environment, Strategy, and Architecture Matrix Organizations Mixed Designs Network Organization Organizing within Subunits R ECENT T RENDS IN A SSIGNMENTS OF D ECISION R IGHTS C ASE : B AGBY C OPY C OMPANY S UMMARY A PPENDIX : B ATTLE OF THE F UNCTIONAL M ANAGERS T EACHING THE C HAPTER We begin by briefly discussing the trade-offs between specialized and broad task assignment. Next we present a 3×3 table. The rows are products and the columns are functions. The entries in the table represent jobs that must be completed within the firm. We discuss how these jobs can either be grouped by function, by product, or matrixed, and also discuss how the firm might group jobs by geography or customer. We emphasize that there is a trade-off with any grouping. Grouping jobs into a subunit enhances coordination and learning among people within the subunit but comes at the cost of reduced coordination and learning among people within the group and other subunits of the firm.
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Managerial Economics and Organizational Architecture Instructor’s Manual Part 1: Chapter Overview and Solutions Chapter 13: Page 2 Pepsi-Cola U.S. Beverages (A) (Harvard Business School case #9-390-034) is a good case to illustrate the concepts in the chapter (as well as Chapter 12). At the time of the case, Pepsi Worldwide beverages is organized around products. This is causing them problems given changes in their environment and strategy. They are choosing between a fully decentralized option, organized around regions, and a matrix organization. We ask three study teams to make presentations to the class. One group presents arguments in favor of staying with the current structure. The second group presents arguments for the matrix organization, while the third group presents arguments for the decentralized option. The rest of the class then discusses their views. Part (B) of the case indicates that Pepsi opted for the matrix organization. We do not give this part of the case to students. However, it is summarized at the end of the class. Recently we have been using
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This note was uploaded on 04/27/2010 for the course FIN 320f taught by Professor Toprac during the Spring '08 term at University of Texas at Austin.

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BSZ_IM_Ch13_4e - Managerial Economics and Organizational...

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