Make Up Assessment for Class Tests

Instruction:
 Solve the cases, write down the answers on blank pages (Draw inferences
from your reference textbook for writing the answers). Answers must be
handwritten.
 Write down your name and id and the test that you missed on the first page
of your answer script.
 Assessment time duration: 10:30 am- 1:00pm. Any submission after this time
period will not be counted. So maintain the time frame strictly.
 After completing the answers, scan all the pages using any scanner app, make
it a pdf or use a zip file and mail to my official mail address:
sabrina.nishat@bup.edu.bd
 The name of the file will contain your id and the test that you missed. (for
example: 17241070 CT 02

Case One:
One of the major functions of an organizational hierarchy is to increase standardization and control
for top managers. Using the chain of command, managers can direct the activities of subordinates
toward a common purpose. If the right person with a creative vision is in charge of a hierarchy,
the results can be phenomenal. Until Steve Jobs’ regrettable passing in October of 2011, Apple
had used a strongly top-down creative process in which most major decisions and innovations
flowed directly through Jobs and then were delegated to sub-teams as specific assignments to
complete.
Then there is creative deviance, in which individuals create extremely successful products despite
being told by senior management to stop working on them. The electrostatic displays used in more
than half of Hewlett-Packard’s instruments, the tape slitter that was one of the most important
process innovations in 3M’s history, and Nichia’s development of multi-billion-dollar LED bright
lighting technology were all officially rejected by the management hierarchy. In all these cases, an
approach like Apple’s would have shut down some of the most successful products these
companies ever produced. Doing “business as usual” can become such an imperative in a
hierarchical organization that new ideas are seen as threats rather than opportunities for
development.
It’s not immediately apparent why top-down decision making works so well for one highly
creative company like
Apple, while hierarchy nearly ruined innovations at several other organizations. It may be that
Apple’s structure is actually quite simple, with relatively few layers and a great deal of
responsibility placed on each individual for his or her own outcomes. Or it may be that Apple
simply had a very unique leader who was able to rise above the conventional strictures of a CEO
to create a culture of constant innovation.

Questions
1. Do you think it’s possible for an organization to deliberately create an “anti-hierarchy” to
encourage employees to engage in more acts of creative deviance? What steps might a
company take to encourage creative deviance?
2. What are the dangers of an approach that encourages creative deviance?
3. Why do you think a company like Apple is able to be creative with a strongly hierarchical
structure, whereas other companies find hierarchy limiting?
4. Do you think Apple’s success has been entirely dependent upon Steve Jobs’ role as head of
the hierarchy? What are the potential liabilities of a company that is so strongly connected to
the decision-making of a single Individual?

Case 2:
One critical structural element of most corporations is the board of directors. In principle, chief
executives report to the directors. In practice, however, boards do not always function as you might
expect. Boards were implicated in many corporate scandals of the past decade—either because
they actively condoned unethical behavior or because they turned a blind eye to it. Many also
blamed lax board oversight for the financial meltdown and ensuing recession. Business media have
called boards “absolutely useless” and “a sham.”
One of the keys to reforming board behavior is ensuring that boards function independently of the
CEO. The Securities and Exchange Commission (SEC) and the New York Stock Exchange
(NYSE) have set guidelines for the independence of directors—who should not be otherwise
affiliated with, employed by, or connected to the organization they direct. The more independent
the structure and composition of the board, the better the corporation will be governed, and the
more effective it will be.
One example of non-independence came to light in 2010. In addition to $225,000 in cash and
deferred stock he was paid to function as a member of Citibank’s board, Robert Joss earned
$350,000 in consulting fees for advising the bank on projects “from time to time.” When asked to
comment, Joss replied, “I’m comfortable that I can handle that.”
Such examples seem egregious violations of independence in board structures. Yet, evidence on
the link between board independence and firm performance is surprisingly weak. One recent
review concluded, “There is no evidence of systematic relationships between board composition
and corporate financial performance.”
 Another structural issue is how the roles of the CEO and chairperson are filled—for instance,
whether these positions are held by different people. Most argue that for the board to function
independently, the roles must be separate, and Bloomberg Businessweek estimates that 37 percent
of the 500 largest U.S. corporations do split them. Yet here, too, the evidence is weak: it doesn’t
appear that corporations with separate CEOs and chairs perform any better than those where the
CEO and chairperson are one and the same.
Questions
1. Do you think Citibank’s consulting arrangement with Robert Joss was unethical? Or is it
possible to justify the arrangement?
2. Why do you think board structure doesn’t appear to matter to corporate performance?
3. Do you think that the roles of CEO and chairperson of the board of directors should always
be separate? Why or why not?