Currently XYZ's compensation system is such that only top managers receive compensation based on the company's performance, while everybody else in the company receives a fixed salary. Moreover, top managers have full discretion over the launch of new products. Due to the failure of the last three products launched by XYZ, top managers are contemplating modifying the allocation of decision rights concerning new products. What changes would make more economic sense?
A. Delegating decision rights down the ladder to those employees who are likely to have more specific knowledge and leaving their current compensation scheme unchanged
B. Leaving the allocation of decision rights unchanged, but changing the compensation of all the employees by awarding them bonuses based on their performance
C. Delegating decision rights down the ladder to those employees who are likely to have more specific knowledge and changing their compensation by awarding them bonuses based on their performance
D. Giving themselves good bonuses and reducing benefits for all other employees
Answer: C
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A. not change. B. increase. C. decrease. D. collapse.
A bank is an example of a financial intermediary
a. True b. False Indicate whether the statement is true or false
An increase in the money supply is likely to reduce
A. money demand. B. interest rates. C. the general price level. D. nominal income.
Which of the following would cause the equilibrium price of ketchup to increase and the equilibrium quantity of ketchup to decrease?
A) an increase in the price of mustard, a substitute for ketchup B) a decrease in the price of tomatoes C) an increase in the price of tomatoes D) an increase in the price of french fries, a complement for ketchup