Suppose Compensation Is Given by W = 100,000 + 157

question 12

Multiple Choice

Suppose compensation is given by W = 100,000 + 157 π + 12S, where W = total compensation of the CEO, π = company profits (in millions) = $340, and S = sales (in millions) = $700. What percentage of the CEO's total earnings is tied to sales of the firm?

• A) 5.2 percent
• B) 13.5 percent
• C) 19.6 percent
• D) 33.0 percent

---

Definitions:

Professional Bureaucracy

A type of organizational structure that is heavily reliant on the expertise and knowledge of professionals within the organization.

Direct Supervision

The practice of overseeing and guiding employees' work and tasks closely and in person.

High-Performance Work Systems (HPWS)

Are organizational approaches that integrate several human resource practices, including selective hiring, extensive training, and employee involvement, to enhance productivity.

Decentralized Decision Making

A managerial strategy where decision-making authority is distributed among various levels within the organization.