Assignment Details: Your answers should be the equivalent of about 1/2 to 1 single-spaced page per question. In all areas, be sure to provide examples to support your responses.

1. In most restaurants in the United States, waiters receive a large portion of their compensations through tips from customers. Generally, the size of the tip is decided by the customer. However, many restaurants require a 15% tip for parties of eight or more. Using concepts from organizational architecture, discuss 2. Why the practice of tipping has emerged as a major method of compensating the wait staff; Why the customer typically decides on the amount of the tip; Why restaurants require tips from large parties, and The pay for performance aspects of this process. 3. Should a company ever produce a good or service if the managers know it will lose money? Why or why not. Provide examples to support your response. Explain as much as necessary to get the point across. 4. Semiconductor chips are used to store information in electronic products, such as personal computers. One of the early leaders in the production of these chips was Texas Instruments (TI). During the early period in the development of this industry, TI made the decision to price its semiconductors substantially below its production costs. This decision increased sales, but resulted in near-term reductions in profits. Analyze why TI might have made this decision. What do you think were the long-term implications to TI? 5. Over the last several years, the airline industry has lost billions of dollars and individual firms (with the exception of a few discount carriers) have been unable to make a profit. Assess aspects of the oligopoly market structure that may be relevant in explaining this outcome. How has the process of filling capacity in the recent years affected this outcome? Do you believe the ticket prices accurately reflect the value to consumers? (you must think of opportunity cost, substitutes to answer this piece). 6. Evaluate some of the factors relating to firms in a monopolistic competition market structure that allow firms in a particular industry to make an economic profit. Be sure to give some examples of firms that operate in a monopolistic competition market structure. Talk a little about the profit, is it long term profit? Why or why not? What would encourage anyone to go into such a business to operate in this market structure? 7. Analyze how failures to align organizational architecture contributed to failure of Enron. Be sure to give some specific examples. Could they have done a better job of aligning organizational architecture with the strategy of the organization? Why or why not?