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Chapters 12 and 13 Collect and Discuss Assignment 4 D ecision Rights The Level of Empowerment & Bundling Tasks into Jobs & Subunits. Dimensions of job design. Variety of Tasks. Decision rights or decision authority. Benefits of Decentralization. Effective use of “local” (specific) knowledge
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Variety of Tasks
Decision rights or decision authority
= individuals’ attempts to affect the distribution of wealth or other benefits in an organization toward themselves, for motives of self-interest
(rep recommends loan approval for unusual case)
(rep grants loan)
(check on performance of loan)Decision management and controlFama-Jensen modelexample of loan approval
Grant major decision control rights to board
Ratifies major decisions initiated by CEO; monitors & can fire & compensate CEO
Initiates & implements major decisions
When decision maker is also the major residual claimant (owner), okay to combine decision management and control.Fama-Jensen Rx and Berle and Means
= Lobbying, politicking, and other nonproductive activities that employees conduct in order to influence decision makers
e.g. Sony acquired CBS records and top execs spent hours each day listening to requests for how decision rights were to be assigned in new organization
Can be reduced by imposing bureaucratic rules
But there is a cost to this approach as it makes the company less flexible and less able to respond to new information and situations
1. The CEO, von Hugel, is considering reorganizing as a multidivisional firm organized around customer type. Draw the revised organizational chart.2. Discuss the pros and cons of the proposed reorganization, relative to the current structure.3. Jessica Wilde, VP of product development, suggests that a matrix organization might be better. Draw the organization chart implied by her proposal.4. Discuss the pros and cons of the matrix proposal relative to the multidivisional proposal.
November 18, 22, 23-- Labor Markets