Question 1 1 pts l You are a management consultant who is travelling to visit a new client. You nd yourself In the ' business lounge waiting for a ight. You oVerhear a conversation between two other business travellers. You quickly learn that both are senior executives at a large retail bank. Their ClISClJSSiOf'l turns to the topic of how the bank should manage its branch managers. Executive #1: "Performance e raluations, on-the-job feed back, performance pay. non-nancial measures all of it is great bi "waste of time. Branch managers only do what is best for themselves. .' if they can screw the customer. they will screw the customer. if they can screw us. they will screw us. - There is only one type of control system that works-complete and total monitoring. You've got to measure, record. and report on everything each manager does from when they clock on to when ; they clock off. We should know when and what each manager has for lunch! Any deviation from the ,- bank's formal policies or central decisions needs to be swiftly and severely punished. Until we can i replace them with robots, we must make them act as much like robots as we can manage." Executive #2: "Absolutely. We don't gain anything from letting the managers decide how to run their own branches. How could some boring old middle manager know what's better for the bank than us? The branch managers need to know that we are always looking over their shoulder. it is simplyjust not possible to align people's interestsit's a dogeat-dog world and that's the reality." Given what you have learned so far in this subject, identify the primary weakness of the organizational structure that the two executives propose and how this weakness likely harms rm performance. 0 The proposed organizational structure it too decentralized. Under this structure. the executives delegate excessive decision rights to the branch managers, who in turn will abuse this autonomy for personal gain at the rm's expense. 0 The executives make the mistake of proposing a divisional structure. In this setting, such a structure leads to the duplication of key functions and fails to take advantage of important economies of scale that when harnessed can lower rm costs. 0 The proposed organizational structure has no obvious weakness; in fact. it is optimal. Under this structure. the executives delegate the appropriate amount of decision rights to the branch managers, who use then use this autonomy to maximize rm vafue. The proposed organizational structure is too centralized. Under this structure. the executives fail to allocate sufcient decision rights to the branch managers. This harms rm performance as the branch managers. when given the authority to do so, can use local information and respond promptly to changes in the needs of customers and subordinates