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Aspects of Corporate Organization

In: Social Issues

Submitted By ccontreras4
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1. What are the three aspects of corporate organization according to the article? Which one is in your view most important to the success of the firm? Explain.

According to Brickley, J. Smith, C. and J. Zimmerman (1995), “A focus on organizational architecture helps identify the role of corporate culture in creating value. [Their] definition of architecture corresponds to some key aspects of what is often called corporate culture. “ The three aspects are composed as follows.
The first of these aspects is the Decision Rights Assignment. This suggests person who makes important decision about companies should have all the relevant information available. Only those individuals with the relevant information should be designated to make key decision, which will enhance the ability of setting the organization in an effective direction.

The second aspect is composed of the Reward System. This is rewarding individuals who make right decisions.

Lastly, the third aspect is the Performance Evaluation System. This is a structure of systems to evaluate the performance of both individuals and business units.

These three approaches rely on the basic principles of economics and provide an integrated approach to solve number of disciplines .The success of a firm depends on the successful interaction all three of these components, and not just one individually. Therefore, all three components are equally important.

2. Explain in which industries franchising has established itself as a more successful form of business
organization (compared to small independently owned companies) and why.

The industry of quick-service restaurants has been the more successful form of franchising in business organization. Established in the 1950s, franchising quick service restaurants has become the more successful form of business organization.

The success can be attributed

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