ACCY304-16%20Organizational%20Architecture

ACCY304-16%20Organizational%20Architecture -...

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Organizational Architecture  Session 16 March 30, 2011 1 Department of Accountancy University of Illinois at Urbana-Champaign
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2 Organizational architecture Department of Accountancy University of Illinois at Urbana-Champaign The organizational architecture of a firm consists of  three elements: The assignment of decision rights within the firm The methods of rewarding individuals The structure of systems to evaluate the performance  of both individuals and business units
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3 The fundamental problems Department of Accountancy University of Illinois at Urbana-Champaign Information problem Important information is held by many different  individuals Information sharing is expensive Incentive problem The principal challenge in designing firms is to maximize the  likelihood that decision makers have both the  relevant  information  to make good decisions and the  incentives   to  use the information productively
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ACCY304-16%20Organizational%20Architecture -...

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