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Different types of teams (cont.) Management team – functional or cross-functional working group of managers formed to plan, organize, lead, and control organizational performance (p. 305) Self-directed team – operates without hierarchical management supervision Defined by specific outcomes and timetables Problem-solving team – working group for...

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Definition: A policy of first degree (or perfect) price discrimination prices each unit sold at the consumer's maximum willingness to pay. This willingness to pay is directly observable by the monopolist. Definition: A policy of second degree price discrimination allows the monopolist to offer consumers a quantity discount. Definition: A policy o...

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MR>MC, firm can increase Q and increase profit MR

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These data are evidence of what is often the most important source of incentives: promotions Why are promotions so important to incentives? work well with specialization & functional org. structures problem: what if the best candidate to promote is not the best performer? e.g., an engineering job ladder In many cases, they are an “Accidental I...

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Making the human side of management strategic Talent management – strategic deliberate approach to attracting new highly skilled workers and developing the abilities of existing employees to meet current and future organizational objectives (p. 277) Human capital – employee skills and experience gained by education and training that increase the ...

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“Slope” of pay-performance relationship drives incentives. Stronger if Incentives reinforce strategy more intrinsic motivation weak, effort is more costly to employee effort has more impact on firm value more “controllable risk” Evaluation is more effective less “uncontrollable risk” employee less risk averse measure has low distortion me...

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Vertical organization structure Characterized by hierarchical authority and communication channels Authority – implicit and explicit power that a manager or employee has to fulfill an organizational function or role Chain of command – predefined structural order of authority that determines how decisions are made and communicated

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Definition: An excise tax (or a specific tax) is an amount paid by either the consumer or the producer per unit of the good at the point of sale. (The amount paid by the demanders exceeds the total amount received by the sellers by amount T)

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A useful way to think about these is the Scope of a measure narrow measures focus on fewer aspects of performance; broad on more ex: department v. firm profit You face a key tradeoff we might use a narrow measure only because it reduces risk broad measures: more controllable risk, distort less, harder to manipulate use broader measures in les...

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Organizational, divisional, and functional strategies are documented using business, tactical, and operational plans, respectively Business plan – stated actions and goals that support the organizational strategy (p. 230) Tactical plan – stated actions and goals that support achieving the divisional strategy Operational plan – stated actions and...

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