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Jim Range owns a Best Ice Cream store

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Jim Range owns a Best Ice Cream store

1. Jim Range owns a Best Ice Cream store, one of 1,000 franchises across the country.Jim doesn’t like to work evenings, so he hires Mary Jo Smith to work the store in theevening for $6.50 per hour. Mary Jo’s Friends come by each evening and she givesthem free cones. Is this an adverse selection problem or an incentive problem? What isthe solution?2. Independence Burgers serves fast food at its 300 franchised outlets across the South.The chain has recently found that (a) people are upgrading to restaurants when they eatout, (b) government regulation of beef has been tightened, and (c) modern foodpreparation technology makes central commissaries more cost effective. What shouldIndependence Burgers be thinking about doing with its organizational architecture?3. Missy Knowles is in charge of all technical developments at Gumby Polymer Rubber.She makes all the choices concerning product innovations in the company. She findsthat she is overworked and that several of her research chemists seem to be spendingwork hours playing gulf. What managerial advice would you provide to Gumby PolymerRubber? Clearly explain your reasoning.4. Decentralized decision-making is very controversial in a corporate environment. Centraloffice managers feel like they are losing control of managers in specific plants orregional offices. What are some of the issues that must be reviewed before making thefinal decision on where to place final decision-making power?5. Macrosoft is implementing a new research and design shop to integrate PCmanufacturers’ requirements for new computer software with Macrosoft’s operatingsystem. The process of integration usually requires five different kinds of softwaremodification task, plus decisions about integrating these modifications. Discuss theproblem of designing the new jobs in this research and design shop.6. Enhanced Computers specializes in rebuilding computers. Recently reorganized intographic divisions, the southern division headed by Dan Unowsky is outperforming theother divisions in sales and profits. However, corporate executives have noticed theUnowsky no longer send refurbished computers to other divisions, and he has institutedspecial warranties and pricing systems unavailable in the rest of the company. ShouldUnowsky be promoted or fired?7. In the Bagby Copy Company case study, the executives are faced with wiring tendifferent copiers that they make in five separate European countries. They must choosebetween specializing by country or specializing by manufacturer of copier type. Theexecutives hire a lobbyist to work for a standard regulatory and sales environmentacross the entire European Union. Why?8. The owners of Market Analysts, a business and economics consulting firm, are bigbelievers in paying benchmark competitive wages. They pay all (non-legally specified)compensation in wages. If the employee wants a benefit, the company has an insuranceprogram but it comes out of the paycheck. Market Analyst tends to hire very youngworkers just out of college. They are energetic and work hard, but after two years theytend to leave for other firms, taking valuable training lessons with them. If MarketAnalysts want to keep its employees, what changes should it make to the terms ofemployment offered to new employees?9. Explain the effect of self-selection on compensating wage differential.10. What are the factors that favor high incentive pay for an employee? Explain which of thefive factors is the most important. Now provide a detailed, expressive fictional storyshowing how this concept plays out.11. The DuPont case is a good example of an incentive package gone awry. In review, itplaced a portion of employee’s pay into an “at-risk pool.” If the division had exceededexpectations, the employees would have saved the DuPont bonus system?12. A few years ago the state legislature of a particular state passed a bill that increasedfunding for only those public universities that showed an increase in graduation rates. Intwo years, the bill was retracted. Why was the bill enforced in the first place just to bewithdraws so soon?

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