ARE 112- Midterm 1 Exam Questions &
Answers 2023/2024
MECE - ANSWER--Mutually Exclusive (each issue is separate & distinct)
Collectively Exhaustive (every aspect comes under only one issue)
-McKinsey Tool
--know all the facts/details
-guard against making early selection of solutions before all other facts are known
Mother City - ANSWER--Caral, Peru; "mother city" of Incan civilization
-complexity and scope
-hierarchy of living arrangements
-served as a major trade area --> rise of class divisions
Transaction Costs - ANSWER--Williamson interview
-cost associated with the time and effort needed to search out, negotiate, and consummate an exchange
(cost of doing business)
--must economize
--have detailed knowledge of attributes of transactions
Cost of Uncertainty - ANSWER--Williamson interview
-making agreements in the context of uncertainty
--hostage situation
--develop bilateral dependency (mutual advantages)
--introduces a kind of deterrence
-reduce uncertainty --> reduce costs
Bounded Rationality - ANSWER--Williamson interview
-can't choose the convenient assumption
, --adhere closely to reality and behavior that intends to be rational -- not capable of maximizing in all
situations
--limitation on ability to work towards the right answer
Incomplete contracts - ANSWER--Williamson interview
-transaction costs, cost of uncertainty, and bounded rationality all cause incomplete contracts
-cannot maximize all benefits of a transaction because they are not aware of all the factors
--complex contracts
--disallowed by old apparatus
--both parties are not equal
Genghis Khan management style - ANSWER--keep only the best people -- promote by ability NOT rank
-looked after their needs
-organized so no one in the dark
--based on decimal system - easy to train
--commands by hand signals and banners - communication
-train, train, train
-mission driven organization
Dynastic Cycles - ANSWER--history driven organization
- ruler unites under "mandate from heaven"
-leads to prosperity
-leads to population increases
-leads to corruption
-leads to no ability to respond to disasters
-ruler loses "mandate from heaven"
-leads to warring states emerging
-leads to one victorious state
-"mandate from heaven" comes back
Answers 2023/2024
MECE - ANSWER--Mutually Exclusive (each issue is separate & distinct)
Collectively Exhaustive (every aspect comes under only one issue)
-McKinsey Tool
--know all the facts/details
-guard against making early selection of solutions before all other facts are known
Mother City - ANSWER--Caral, Peru; "mother city" of Incan civilization
-complexity and scope
-hierarchy of living arrangements
-served as a major trade area --> rise of class divisions
Transaction Costs - ANSWER--Williamson interview
-cost associated with the time and effort needed to search out, negotiate, and consummate an exchange
(cost of doing business)
--must economize
--have detailed knowledge of attributes of transactions
Cost of Uncertainty - ANSWER--Williamson interview
-making agreements in the context of uncertainty
--hostage situation
--develop bilateral dependency (mutual advantages)
--introduces a kind of deterrence
-reduce uncertainty --> reduce costs
Bounded Rationality - ANSWER--Williamson interview
-can't choose the convenient assumption
, --adhere closely to reality and behavior that intends to be rational -- not capable of maximizing in all
situations
--limitation on ability to work towards the right answer
Incomplete contracts - ANSWER--Williamson interview
-transaction costs, cost of uncertainty, and bounded rationality all cause incomplete contracts
-cannot maximize all benefits of a transaction because they are not aware of all the factors
--complex contracts
--disallowed by old apparatus
--both parties are not equal
Genghis Khan management style - ANSWER--keep only the best people -- promote by ability NOT rank
-looked after their needs
-organized so no one in the dark
--based on decimal system - easy to train
--commands by hand signals and banners - communication
-train, train, train
-mission driven organization
Dynastic Cycles - ANSWER--history driven organization
- ruler unites under "mandate from heaven"
-leads to prosperity
-leads to population increases
-leads to corruption
-leads to no ability to respond to disasters
-ruler loses "mandate from heaven"
-leads to warring states emerging
-leads to one victorious state
-"mandate from heaven" comes back
