Midterm 2 Flashcards
What are the five general properties of Quantitative Performance Measure?
risk profile
distortion
potential for manipulation
scope
match to job design
What is specific knowledge?
information that is costly to communicate
What is general knowledge?
information that is inexpensive to communicate
What are the five characteristics of knowledge?
Perishable
Complex
Technical
Idiosyncratic
Subjective/Experiential
A firm should mainly adopt the classical design approach if the environment is: (List the three conditions)
simple, stable, & predictable
According to the Prospect Theory, people are generally risk-seeking when facing potential losses. True or False.
True
Describe three major features of the utility function in the Prospect Theory.
Reference Dependence
Loss Aversion
Diminishing Sensitivity
Describe two major features of the expected utility theory.
Utility is the function of individuals wealth
It is concave because individuals are risk averse
What are four characteristics of job design?
Skills
Discretion
Multitasking
Interdependence
What is a narrow job?
A job with low on multitasking, discretion, skills, and interdependence
What is an enriched job?
A job that is high on multitasking, discretion, skills, and interpendence
What are the three benefits of Teams?
1) Complementaries between the contributions of individual workers
2) Inter-task learning
3) Knowledge Transfer
What are the costs of teams?
Disadvantage in group decision making
Free rider effects
Ways to reduce free riding problem
Peer monitoring
Norms must be maintained
