Respond to both discussion post
POST 1
As we look into the reading we see that Incentive conflict can be described as the nonautomatic alignment of objectives between members/ management within a firm (2016). According to Zimmerman, it can be depicted as while an owner of the firm may want to adjust measures to maximize company profits such as raising prices, the demanders or employees of the firm may be opposed to it (2016). For my example, It is a case of perquisite taking. As defined in the textbook, perquisite taking is a source of conflict that arises as managers refuse to overpay managers, while the managers expect sufficient salaries and good company benefits (2016). In my case, I can recall internal conflict within my previous employer as Managers felt the firm should’ve invested more in its human capital for the work they had been doing over the prior two quarters of the year. After exceeding quarterly records they were met with little compensation for their efforts which made them feel underappreciated and caused them to then provide minimal work effort. The organizational stool of the firm was definitely unbalanced as the firm has been known to provide a little reward to its employees and this added more fuel to the fire causing managers to either disband from the company or provide subpar work which dropped company production.
POST 2
An incentive conflict in a firm I worked at that reduced firm value is when I was a marketing intern for a company. This company was a fitness franchise, so the owner of this particular location did things differently than others. They had about six coaches and two owners. Since they just recently opened their company and wanted to get their name out there, they wanted to hire an unpaid intern. I was hired onto the team to help them get their name out there. When covid happened, the owners stopped talking to half of the staff. Since I was unpaid, they saw this to not talk to me as well. Even though I was unpaid and their coaches were underpaid this is no way to run a company smoothly.
A high-performing organizational architecture is a three-legged stool comprised of delegated decision-making, performance measurement, and incentivized people. There were a few parts of the organizational stool that were unbalanced. The way this contributed to the conflict was by the decision-making leg was broken. The way you saw this was because the decision of the owners not to talk to their staff when a pandemic broke out shows that the company did not have the best decision-making skills in a crisis. This could have been prevented by them talking to everyone to fill in what they had to do to survive. A lot of different companies had to, unfortunately, let people go because of the pandemic. If the owners explained why they were doing this instead of shutting people out they would have never broken this leg. You see how this is an issue because in order for the stool to be enough all three legs must be present and working in balance for a company to achieve the best performance (Three Critical Legs to Top Business Performance, 2017).
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