Ateneo de Naga University Graduate School presents.
A scientist knows her project will never pay. She keeps going anyway.
An operator knows his machine better than anyone. He never runs it at full speed.
Neither lacks ability. So what is missing?
A good decision needs two things at once: knowledge and the incentive to use it.
Markets solve it without a designer. Prices move decisions to the people who know. Ownership makes them care.
Inside the firm, the price system goes quiet. Firms must design three things: decision rights, the reward system, and performance evaluation.
Form follows function: environment, strategy, architecture, firm value.
Your competitor just reorganized. Should you? Reorganize for a reason, not a trend.
Chapter 11, Organizational Architecture. Who decides. Who cares. Who designs it. MBA 210 Managerial Economics. Presented by Jonathan Bontile. Professor Rommel R. Serrano. Saturday, November 21, 2026.
Ateneo de Naga University · Graduate School
presents
A scientist knows her project will never pay.
She keeps going anyway.
An operator knows his machine better than anyone.
He never runs it at full speed.
Neither lacks ability.
So what is missing?
The fundamental problem
A good decision needs two things at once.
Knowledge
Incentive
Good decision
Markets
Nobody designed it. It just works.
JOB 01
Prices move decisions to the people who know.
JOB 02
Ownership makes them care.
Inside the firm
The price system goes quiet.
01Decision rights
02Reward system
03Performance evaluation
Markets provide these for free. Firms have to design them.
What shapes it
Form follows function.
🌐
Environment
🧭
Strategy
🏛️
Architecture
📈
Firm value
Your competitor just reorganized. Should you?
Expected benefits
Expected costs
RedesignNew systemsWinners and losersToo-frequent change
Reorganize for a reason, not a trend.
MBA 210 · Managerial Economics
Chapter 11Organizational Architecture
Who decides. Who cares. Who designs it.
Presented by Jonathan Bontile Professor Rommel R. Serrano · Ateneo de Naga University Graduate School
Based on Brickley, Smith & Zimmerman (2016), Managerial Economics and Organizational Architecture (6th ed.), Ch. 11. Campus footage: ADNU Office of Student Affairs.