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Managerial Economics - To successful firms assign decision...

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Managerial Economics Chapter 1 1) Define the three critical elements of organizational architecture? The assignment of decision rights within the company The methods of rewarding individuals The structure of systems to evaluate the performance of both individuals and business units. 2) Do you agree with the following statement, “Managers can structure organizational architecture to motivate individuals to make choices that increase firm value?” I agree with the following statement because it is usage of that term refers only to the hierarchical structure that is decision right assignment and reporting relationships- while it generally ignores the performance –evaluation and reward systems.
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Unformatted text preview: To successful firms assign decision rights in ways that effectively link decision- making authority with the relevant information for making good decisions. Therefore, management must also ensure that the company’s reward and performance-evaluation system provide decision makers with appropriate incentives to make value-increasing decisions. 3) Define Economic Darwinism? Economic Darwinism in operation as completion weeds out ill-designed organizations that fail to adapt. 4) Define benchmarking Benchmarking generally means looking at those companies that are doing something best and learning how they do it in order to emulate them....
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