3.In an M-form organization

a.The number of divisional conflicts are reduced b.Decision making speed increases c.Customer retention tends to increase d.All of the above

4.Which of the following is TRUE?

a.A manager being rewarded on division revenues has no incentive to make good decisions for his division b.Maximizing division profits always leads to maximizing company-wide profits c.Profit centers usually require the highest degree of attention of corporate executives d.Managers of profit centers are given a lot discretion in their decision making

6.Information gathering for a moral hazard problem happens

a.Before the agent is hired b.After the agent is hired c.After the agent is fired d.None of the above

7.For managers who know that they have no chance of meeting their goals, high powered sales goals

a.Give an incentive to spread out their sales into the year b.Give an incentive to accelerate costs or delay sales c.Give no incentive to accelerate sales or delay costs d.None of the above

8.The efficient transfer price is

a.the upstream division's marginal cost b.the downstream division's average cost c.the downstream division's marginal cost d.the upstream division's average cost

9.Annual budgeting of production goals of a division within a firm

a.is an accounting mechanism to plan for the costs and revenues over a time period b.increase the burden on the division when goals rise c.can lead to accumulated inventory when the goals of an upstream division are arbitrarily set too high d.all of the above

18.Which of the following is FALSE?

a.Maximizing division profits can sometimes lead to reducing company-wide profits b.Profit centers usually largely run themselves c.Managers of profit centers are given a lot of discretion in their decision making d.A manager being rewarded on division revenues has no incentive to make good decisions for his division

19.Relative to a manager of a company owned store, a franchisee is more likely to

a.Work only night shifts b.Work only evenings c.Work very hard d.Not work as hard

20.When decision rights are decentralized, typically

a.decisions are being moved to those with less of the relevant information b.decisions are being moved to those with stronger incentives to make good decisions c.decisions are being moved from those with weaker incentives to make good decisions d.decisions are being moved to those with more of the relevant information

23.Which of the following is TRUE about firms organized along functional lines?

a.In functional organizations workers develop functional expertise b.Workers find it difficult to share information within their division c.They inhibit the exploitation of economies of scale d.All of the above

24.A parent company rewarding managers on profit centers can simply

a.Reward the manager on the costs of the division b.Subtract division costs from the division revenue and reward the manager on the difference c.Reward the manager on the revenue of the division d.Add the division costs to the division revenue and reward the manager on the sum

28.All of the following can cause conflict between divisions EXCEPT

a.corporate executives reward managers based on firm profitability instead of divisional profitability b.Coordination between divisions does not benefit all divisions equally c.managers of profit centers care too little about the effects of their decisions on other divisions d.corporate executives cannot tell when one divisional manager's decisions are appropriate or not