1. Chapter 12: Decision Rights: The Level of Empowerment
Brickley, Smith, and Zimmerman, Managerial Economics and Organizational Architecture, 4th ed.
Chapter 12: Decision Rights: The Level of Empowerment

2. Decision Rights-empowerment learning objectives
Define and apply the concept of decision authority
State and provide examples of costs and benefits of decentralized decision making
State and provide examples of costs and benefits of team decision making

3. Assigning tasks and decision rights
Production process involves tasks bundled into jobs
Job dimensions
variety of tasks
few or many
decision authority
limited or broad

4. Dimensions of job design

5. Centralization versus decentralization benefits of decentralization
Effective use of local knowledge
local tastes and preferences
price sensitivities of particular customers
Conservation of management time
senior management focus on strategy
Training and motivation for local managers

6. Centralization versus decentralization costs of decentralization
Potential agency problems
effective control systems may be expensive
Coordination costs and failures
Less effective use of central information

7. Benefits and costs of team decision making
Benefits of team decision making
improved use of dispersed specific knowledge
Employee buy-in
Costs of team decision making
collective-action problems
free-rider problems
Use teams if benefits exceed costs

8. Decision management and control Fama-Jensen
Initiation
Implementation
Decision control
Ratification
Monitoring

9. Influence costs
Employees have incentives to influence managerial decisions
Influence activities may entail costs
time away from the job
dysfunctional activities
Limits on managerial discretion may reduce influence costs