You Can Take That to the Bank (Scenario)

question 110

Multiple Choice

You Can Take That to the Bank (Scenario)
Changes in banking regulations, a series of loan defaults by customers, and a decline in the real estate market have forced Eastern Bank, a large regional Gulf bank, to downsize in an effort to improve profitability and bolster its sagging stock price. Sawsan, a regional branch supervisor, has been tasked with preparing a management report concerning how these cuts are affecting bank operations and customer service. Sawsan believes that the most important problem that has emerged concerns the span of control and decision- making authority within the bank. In the past, bank policy was that no manager should supervise more than six subordinates and only managers could make decisions for their individual units. However, with many of the cuts coming in middle management, upper management has increased its span of control while still insisting on managerial- only decision making at the unit level. The result is that upper managers spend all of their time putting out fires and subordinates feel they are getting answers too slowly. As a result, lower level employees are requesting greater authority to make decisions on their own. However, they are not as experienced at making decisions as upper- level managers. Sawsan believes that structural changes must be made that reflect Eastern Bank's new situation.
-Based upon the description of Eastern Bank's situation, which aspect of the current situation is inconsistent with Eastern Bank's decision to maintain a centralized form of decision making?

• A) The company is large.
• B) Lower- level managers want a voice in decisions.
• C) Lower- level managers are not as experienced at making decisions as upper- level managers.
• D) The organization is facing a crisis.

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Definitions:

Confined

Restricted in space or area; being in a situation that limits freedom of movement or action.

Herbert Simon

An American economist, political scientist, and cognitive psychologist known for his contributions to the theory of decision-making and problem-solving in organizations.

Emotions

Complex psychological states that involve physiological arousal, expressive behaviors, and conscious experience.

Conscious

The state of being aware of and able to think about one's surroundings, thoughts, and feelings.