In Pushing Decision Rights Down to the People with the Knowledge

question 23

Multiple Choice

In pushing decision rights down to the people with the knowledge about processes or customer preferences, it is important that companies:

• A) use their reward system to reinforce their performance/evaluation systems.
• B) integrate production management with production control.
• C) keep their reward system independent of other factors.
• D) keep issues of organizational architecture out of the picture.

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Definitions:

Marginal Cost Curve

A graphical representation showing how the cost of producing one more unit of a good changes as production volume varies.

Upward Sloping

A line on a graph that shows an increase in a certain variable as another variable increases.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and therefore, should not be considered in making future economic decisions.

All-Day Ticket

A pass that allows unlimited use or access to a service, such as public transport or an event, for the entire day.