Question 23 1 pts A bank divided in different divisions for consumer banking and

Question

Question 23

1 pts

A bank divided in different divisions for consumer banking and business banking is an example of

   An M-form of an organization

   A functional organization

   An N-form organization

   All of the above

question 24

1 pts

When a transfer price is decreased

   the buying division will chose to purchase less from the selling division

   the buying division will chose to purchase more from the selling division

   the selling division will chose to purchase less from the buying division

   the selling division will chose to purchase more from the buying division

Question 25

1 pts

Which of the following is FALSE?

   Maximizing division profits can sometimes lead to reducing company-wide profits

   Managers of profit centers are usually given a lot of discretion in their decision making

   Profit centers usually require the highest degree of attention by corporate headquarters

   A manager being rewarded on division revenues has the most incentive to make good decisions for his division

Question 26

1 pts

The parent company would want to reward managers based on division revenues because

   The managers usually have the least information about their divisions

   It would incentivize the otherwise clueless managers about the daily activities of their divisions

   The managers usually have the best information about how to run their divisions

   None of the above

Explanation / Answer

Question 23 : An M-form of an organizationan. Because, organizational structure adopted by firms in which the management of a firm is decentralized, with separate groups or divisions of the firm responsible for groups of similar products or serving separate markets. Each group or division will have its own autonomous management team and its own separate marketing, production, etc., functions. With such a structure, the top managers at head office leave the day-to-day running of the divisions to the managers responsible, although they monitor the profitability performance of the divisional managers and generally retain power over the allocation of investment funds to the divisions. And N form organization entails combination of knowledge rather than its division, which is the basic principle in the M-form. So from both the definitions it is clear that it is an M form of an organization.

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