Assignment: Cases Analysis Of Risk, Uncertainty And Managing Incentives
Part 1
Select a company of your choice, any company but Southwest Airlines, and write a six to eight (6-8) page paper in which you:
1. Evaluate a company's recent (with in the last year) actions dealing with risk and uncertainty.
2. Offer advice for improving risk management.
3. For the company you selected examine an adverse selection problem and recommend how it should minimize its negative impact on transactions.
4. For the company you selected determine the ways in which it is dealing with the moral hazard problem and suggest best practices used in the industry to deal with it.
5. For the company you selected identify a principal-agent problem and evaluate the tools it uses to align incentives and improve profitability.
6. For the company you selected examine the organizational structure and suggests ways it can be changed to improve the overall profitability.
Part 2
The Principle-Agent Problem, To Manage Incentive You Have to Understand Motivation.
What Is the Principle-Agent Problem? Here is some help.
The 2nd Case Study
In this part we look at the principle-agent problem and what went wrong at Wells Fargo. After another CEO Tim Sloan the CEO who was suppose to restore the bank's reputation stepped down March 28, 2019 there are still huge questions.
What about the incentive system resulted in massive creation of fake accounts by the retail operation and why did it only get worse from there? As you dig into this remember Froeb's rule "Avoid the temptation to think about the problem from the employee's point of view...{and ask} how does the organization give employees enough information to make good decisions and the incentives to do so?"
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.