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Organizational Architecture and Decision Making

1.Mark Wilson, chief of personnel, has been instructed to increase the hiring of woment at the Morton Cement Company. Mark will be evaluated by the company president Josh Cohen on his success or failure in meeting this goal. Mark does not evaluate the performance of any of the division chiefs, and each chief must approve all new division employees. Do you expect Mark to succeed in this endeavor? Why or why not? Explain your reasoning.

2. Define the terms decision management and decision control. Under what circumstances might it be optimal to make one individual responsible for both decision management and decision control? What do you expect the ownership of common stock to look like in such a firm? Explain.

3. Jan van der Schmidt was the founder of a successful chain of restaurants located throughout Europe. He died uexpectectedly at the age of 55. Jan was sole owner of the compan's common stock and was known for being quite authoritarian. He personally made most of the company's perssonnel decisions. He also made moost of the decisions on menu selection, food suppliers, and advertising programs. Employees throughout the firm are paid fixed salaries and were closely monitored by van der Schmidt. Jan's son, Karl, spent much of his youth driving BMWs around Holland and Germany at high speeds. He spent little time working with his father in the restaurant business. . Nonetheless. Karl is smart and just and just received his MBA degree from a leading business school. Karl has decided to follow his father as the chief operating officer of the restaurant chain. What advice about orgainzational architecture for the company would you offer Karl now that he has taken over?

Solution Preview

1) Mark may not be much successful in this task. There could be conflict of interest and opinions between Mark and Division chiefs, who need to approve all new division employees. Since Mark does not does not interact much with the division chiefs, he may not have correct information about their exact requirements in their own divisions. He will also not be aware of the characteristics desired by division chiefs in the new employees.

2) In a decision making process, initiation of proposals and actual implementation are part of decision management whereas decision control includes choice of the decision to be implemented and its monitoring. Generally, decision management is decentralized to take advantage of specialized information at lower levels and decision control is centralized to make sure that ...

Solution Summary

Mark may not be much successful in this task. There could be conflict of interest and opinions between Mark and Division chiefs, who need to approve all new division employees.

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