P1-5:
A) I think that by taking extra 20 minutes the front desk receptionist is not respecting the rules of the work and that may cause a problem, which could reflect on the quality of the job because during these 20 minutes they could lose customers or make them unsatisfied.
If she work 6 days a week it means that they are paying her two extra hours without working and that is a waste of money. This problem can be solved by clocking-in and clocking-out even time for lunch, or by taking, these minutes out of her salary that might make her think about her responsibilities.
B) Division managers use their authority to give wrong information about the company. The problem exists when management and stockholders have conflicting ideas on how the company should be run in short-term. That could be hard for the company when they are going to plan their costs. In addition, it might ruin the number balance sheets, which could affect future gains. The solution is that the management should control division managers’ performance and give managers the performance shares, which result in meeting the stated performance goals. These goals must be more efficient for management to plan goal to generate profit. Agency cost could be by reducing and by providing appropriate incentives to align the interests to division managers.
C) The chief executive officer risks negative behavior because of dealing with the competition and did not involve his company’s best interests. He is putting his needs of planning a secret merger with his competition, which most likely can result potential profit for him, and possibly his company .The CEO should know himself and the risks of CEO overconfidence.
His behavior results in exactly this type of good faith mismanagement of the business. The added challenge for corporate governance is to move beyond managerial motives to account more for human psychology and how managers actually behave and make business decisions when they are well...