Question 1. Your firm has built a manufacturing plant not too far from a large European city. You are a member of a management team that is charged with designing employment contracts that promote high effort among the employees. What factors might you bring to the attention of the team? Would your answer change if the manufacturing plant is located near a fairly isolated village in a developing nation?
Question 2. Your firm, which specializes in complex electronic products, has grown rapidly and you are now incorporating. Even after incorporation, a large percentage of the stock will be held by the founders, including you. Your colleague recommends a large corporate board made up exclusively of outsiders. She is very concerned about the sensationalized corporate scandals in recent years. Do you agree with her recommendation? Explain.