Chapter 11: Organizational Architecture
TIPPING IN RESTAURANTS
Discussion Question Answers:
a. Tipping provides incentives for waiters to do a better job compared to paying them a
job.
c. For tipping to work, the customer must follow through on the implicit promise to tip if
the quality of service is good. Individuals in large parties often have incentives to shirk on the tip
(free ride). For instance, if each individual agrees to place his share of the bill in a common pool,
Chapter 12: Decision Rights: The Level of Empowerment
TEAMS AT NUCOR VS. LEVI STRAUSS
Discussion Question Answers:
1. Advantage: Sharing knowledge, skill, expertise among team members
Advantage: Cooperation among team members
2.
Nucor Plant Levi Strauss
+ employees self-selected to work in
– employees who self-selected to
+ complicated production process
– not a very complicated product;
MEDFORD UNIVERSITY*
Discussion Question Answers:
1. There are at least two reasons why the president appointed a task force. First, the members are
more likely to have specific knowledge about employee preferences than the human-resources
staff. It is important to incorporate these preferences in designing an optimal fringe benefit
package. This issue is addressed in greater detail in chapter 14. Second, other employees are
2. The president should not expect that task force members will necessarily strive to cut costs.
They are likely to represent their own self interest, which might be to increase fringe benefits. To
3. The head of the task force has substantial power to influence the task force’s
recommendation. For instance, he can use agenda control and the appointment of subcommittee
chairs as tools to promote particular outcomes. Given this power, the president wanted to appoint
a chair whose interests are aligned with those of the overall university. The hospital administrator
is likely to favor actions that reduce employee costs. He is also likely to know about health
4. She does not want to commit to accepting all recommendations generated by the committee.
Collective decision making can produce suboptimal outcomes and it is important for the
president to reserve the right to make modifications. Also, she may have important knowledge
about other aspects of the university that should be incorporated in the plan (for example,
5. The secretary can monitor the actions of the task force and serve as an information channel to
* More complete answers to these questions can be developed by incorporating the material in the appendix
to this chapter.