Question

What indicates who in the organization has the responsibility to initiate, supply information for, approve, implement, and control various types of decisions?

a) Responsibility matrix
b) Decision rights
c) Delegation hierarchy
d) Decision protocols

Answer 1

Decision protocols indicate who in an organization is responsible for initiating, informing, approving, implementing, and controlling decisions, structured through a hierarchy of authority to balance transaction and conformity costs.

Step-by-step explanation:

Decision protocols in an organization define who is responsible for various types of decision-making processes. These protocols outline the hierarchy of authority, dictating the initiation, supply of information, approval, implementation, and control of decisions. In organizations, this hierarchy creates an efficient chain of command, similar to how a retail employee at Walmart reports to a shift manager who then reports up further to a store and regional managers, and ultimately to the CEO.

This is crucial in managing transaction costs and conformity costs; where empowering a single individual can decrease the former but potentially increase the latter. Groups making decisions might have lower conformity costs but higher transaction costs due to the complexity of coordinating multiple opinions. Effective decision protocols are integral to achieving a balance between these costs and maintaining control over the bureaucracy.