Quiz 4: Organizational Architecture


Decision rights and rights systems Every assets or resources used in the organization has certain decision making rights on how they can be used. The management provides this decision making rights to various people in the organization to undertake the smooth functioning of the organization. This also helps in decentralizing the decision making. In order to undertake empowerment of work it is not required for managers to let go the control. If an employee has decision making and control rights then this would create agency problem. In order to empower the work it is necessary for managers to not completely let go the control and maintain certain kind of control that is retain partial decision making. Employees can still be empowered if they are provided with certain decision making right and not giving them total control.

Pay performance Every organization should have a proper and well defined pay performance compensation implemented in the organization. A pay performance should help in improving company's performance and also provide good compensation to employees. Pay performance should meet the objective of the organization and should not lead to disadvantage to the business. This compensation policy would have many side effects and could lead to disadvantage for society. This is because with this policy of compensation the number of arrests would go up. There is possibility that a person with small suspect would also be arrested in order to receive higher compensation. The quality of arrests would go down that is police would arrest even though arrest is not necessary in the situation. Police would also not be co-operative towards the public as arrest would be their main goal rather than reducing the crimes.

Opportunistic behavior Opportunistic behavior is where individual or organization are motivated to work towards their self-interest and that of business to maximize their profits rather than interest of others. a.Faculty members having large number of students like finance faculty would rather upload the material on web pages and distribute material electronically while courses having smaller number of batches would take photocopy of materials. The photocopy costs of higher batch would be expensive and thus sending electronically would benefit the course. b.It is inefficient to the extent because majority of the students will have to download the material from online and take print-out of the notes. This would be expensive for the student however for the course it would be cheaper to take photo copy as bulk quantity would charge lower price. In case the students are not taking any print-out and reading online then they should provide to all students the course material electronically rather than photo copy.