What are influence costs and why do they inhibit efficient organizational design?
What will be an ideal response?
It is usually better to allow employees and lower-rung cadres to make decisions. However, the moment this happens, the employees spend too much time influencing others at the top. They spend way too much time lobbying rather than doing the job. These are called influence costs. That is why there should be a limit to which employees can use their discretion. Efficient organization design should take these influence costs into account before arbitrarily assigning decision rights across the hierarchy.
You might also like to view...
Suppose you plan to hold a stock for one year. You expect that, in one year, it will sell for $30 and pay a dividend of $3 per share. If your required return on equity is 10%, what is the most you should be willing to pay for the share today?
A) $3.30 B) $23 C) $30 D) $33
Which of the following is correct?
a. Real GDP is the variable most commonly used to measure short-run economic fluctuations. These fluctuations can be predicted with a much accuracy. b. Real GDP is the variable most commonly used to measure short-run economic fluctuations. It is almost impossible to predict these fluctuations with much accuracy. c. Nominal GDP is the variable most commonly used to measure short-run economic fluctuations. These fluctuations can be predicted with some accuracy. d. Nominal GDP is the variable most commonly used to measure short-run economic fluctuations. It is almost impossible to predict these fluctuations with much accuracy.
In countries such as Canada that have socialized health care, the government operates hospitals, and health-care services are financed through tax revenue. In these countries,
A) the government is able to provide as much health care, free of charge, as citizens would like. B) methods other than price, such as political rules and waiting lists, must be utilized to allocate health-care services. C) a large number of services, such as MRIs, that involve expensive equipment are performed. D) citizens are usually so satisfied with their health-care system that they never travel to other countries to purchase health-care services.
The impact of Hurricane Katrina on consumers in the economy was to make them very pessimistic about their future incomes. How does this increased pessimism affect the aggregate demand curve?
A) This will move the economy down along a stationary aggregate demand curve. B) This will move the economy up along a stationary aggregate demand curve. C) This will shift the aggregate demand curve to the left. D) This will shift the aggregate demand curve to the right.