Order Your Paper From the most reliable Essay writing Service. 

.

 



Question: When Friendly Ice Cream was a private corporation, each store manager had wide discretion over de...

Show transcribed image text When Friendly Ice Cream was a private corporation, each store manager had wide discretion over decisions about hiring, menu choice, and customer service. Each manager also received a portion of the profits from the store for which he was responsible. Hershey Corporation acquired Friendly and saw an opportunity to improve efficiency by standardizing policies and sharply reducing the discretion and decision making authority of the individual store managers. In implementing this new strategy, Hershey eliminated the bonus opportunities for store managers and replaced them with -a higher fixed salary. How might this change have affected the performance of Friendly? How does Agency Theory help to explain this change?

When Friendly Ice Cream was a private corporation, each store manager had wide discretion over decisions about hiring, menu choice, and customer service. Each manager also received a portion of the profits from the store for which he was responsible. Hershey Corporation acquired Friendly and saw an opportunity to improve efficiency by standardizing policies and sharply reducing the discretion and decision making authority of the individual store managers. In implementing this new strategy, Hershey eliminated the bonus opportunities for store managers and replaced them with -a higher fixed salary. How might this change have affected the performance of Friendly? How does Agency Theory help to explain this change?