Exam

The number of levels of hierarchy, in turn, determines the managers's

Span of Control

behavioral economics

caution that incentives that are too-high powered may have a negative effect on job performance

Smaller entrepreneurial ventures tend to have a _________ ______________ of specialization

loe degree

input controls

mechanisms in a strategic control-and-reward system that seek to define and direct employee behavior through a set of explicit, codified rules and standard operating procedures that are considered prior to the value-creating activities

In tall organizational structures, the span of control is

narrow

simple structure

organizational structure in which the founders tend to make all the important strategic decisions as well as run the day-to-day operations

organizational design

process of creating, implementing, monitoring and modifying the structure process, and procedures of an organization

In flat structures, the span of control is

wide (one manager supercises many employees)

Organizational Structure

A key to determining how the work efforts of individuals and teams are orchestrated and how resources are distributed.

Moral Hazard

A situation in which information asymmetry increases the incentive of one party to take undue risks or shirk other responsibilities because the costs incur to the other party.

stock options

An incentive mechanism to align the interests of shareholders and managers, by giving the recipient the right (but not the obligation) to buy a company's stock at a predetermined price sometime in the future.

inside directors

Board members who are generally part of the company's senior management team; appointed by shareholders to provide the board with necessary information pertaining to the company's internal workings and performance.

Organic Organizations

Characterized by a low degree of specialization and formalization, a flat organizational structure, and decentralized decision making.

Larger firms such as Fortune 100 companies, tend to have a ________ __________ of specialization

Higher degree

output controls

Mechanisms in a strategic control-and-reward system that seek to guide employee behavior by defining expected results (outputs), but leave the means to those results open to individual employees, groups, or SBUs.

Unicorns

Private start-up companies valued at a billion dollars or more

inertia

a firms resistance to change the status quo, which can set the stage for the firm's subsequent failure

Adverse Selection

a situation that occurs when information asymmetry increases the likelihood of selecting inferior alternatives

Agency Theory

a theory that views the firm as a nexus of legal contracts

Formalization

an organizational element that captures the extent to which employee behavior is steered by explicit and codified rules and procedures

Specialization

an organizational element that describes the degree to which a task is divided into separate jobs (Division of Labor)

Hierarchy

an organizational element that determines the formal, position-based reporting lines and thus stipulates who reports to whom

Centralization

an organizational element that refers to the degree to which decision making is concentrated at the top of the organization

Formalized Structures

are characterized by detailed written rules and policies of what to do in a specific situation

outside directors

board members who are not employees of the firm, but who are frequently senior executives from other firms or full-time professionals

Mechanistic organizations

characterized by a high degree of specialization and formalization and by a tall hierarchy that relies on centralized decision making

poison pill

defensive provisions to deter hostile takeovers by making the target firm less attractive

Planned Emergence

found in more decentralized organizations

Tall Structure

if many levels of hierarchy exists between the frontline employee and the CEO

Flat Structure

if there are few levels of hierarchy in Firm

To implement a formulated business strategy,:

structure must accommodate strategy, not the other way around

Top-down Strategic Planning

takes place in highly centralized organizations

board of directors

the centerpiece of corporate governance, composed of inside and outside directors who are elected by the shareholders

Span of Control

the number of employees who directly report to a manager

coporate governance

the system of mechanisms to direct and control an enterprise in order to ensure that it pursues its strategic goals successfullly and legally