How Is the Architecture Within Firms Usually Set Up

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The Answer is Organization design is created by executives through explicit and implicit contracts. The senior management sets up policies regarding decision rights of the agents in the firm. Managers must also develop control systems which enables proper performance evaluation. CEOs are also decision makers and they can design alternative ways to obtain information, delegation being the most common. Thus, a firm can be thought of as a layer of management, where each layer is responsible for optimal information acquisition and distribution.

How Is the Architecture Within Firms Usually Set Up

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