Question 1: Even before the metals and manufacturing type companies, U.S. railroads in the nineteenth century were M-form organizations based on geography. Why might a large railroad be better organized as M-form than U-form?
Question 2: Your university is probably an M-form organization. Its president administers schools, for example, a college of business and a college of liberal arts. The college of business each in turn has a dean who is responsible for faculty departments such as economics and finance. Why is an M-form more likely than a U-form to be an efficient way of organizing a university and to organize the schools within?
In most universities faculty with specialized interests will often attempt to break off from existing department and form ones devoted to their own specialties. Do you expect that this will produce an inefficiently large number of departments? Why do you expect that pressure by employees to form fragmented departments will be a smaller problem in for profit corporations than in nonprofit or governmental universities?
Question 3: Why might you expect to see flat royalty payments in home-based franchises but revenue-based royalties in franchisees that operate from commercial buildings? (Hint: Among the most popular home-based franchises are cleaning services offered to businesses, and delivery services for seniors who live at home.)
(a) Is your explanation consistent with the fact that franchised tutoring services often charge a fixed royalty per student enrolled?
Question 4: A small-volume foreign auto maker limits the number of its franchised dealers in the United States and gives them exclusive territories. There are also non-dealers who have no official connection with the manufacturer. They buy its cars overseas and sell them in the United States, a phenomenon sometimes called a “gray market.” If you are a manufacturer do you necessarily want the gray market to cease to exist” Why or why not? How about if you are a franchised dealer?