Economics of Organisation Essay Example | Topics and Well Written Essays - 3750 words - 2

Economics of Organisation - Essay Example It MUST NOT exceed 4,000 words excluding references. Assignments: Students should submit at least one practice essay and problem solution based on the class topics, the mock exam paper or previous exam papers in addition to the coursework assessment. This should be handed to Dr Martin Hoskins for assessment before the end of the Christmas vacation. Assessments submitted after this date will not be marked. The assessment, which contributes 30% of the module mark, should be submitted to the ‘Reception’ before the end of the week after the Christmas vacation. It MUST NOT exceed 4,000 words excluding references. Remember to include your name or student number, degree group and the module name and number. Make clear reference to material, including websites, which you use. You will be required to sign a ‘No plagiarism’ declaration. †¢ What are the problems that face the owners of firms in designing incentive pay schemes when work effort cannot be directly monitored? What evidence is there that these schemes are successful? How can incentive schemes provide the ‘wrong’ incentives? †¢ By referring to examples of corporate failure assess the importance of the principal-agent problem in explaining failures of corporate governance? How can regulatory reform such as the ‘Sarbanes – Oxley’ legislation and recent changes in bank regulations mitigate the ‘principal- agent’ problem? This section will discuss the problems posed by the separation of ownership from control. It will consider the problems of managing and controlling complex organisations where information is imperfect, contracts incomplete and there are opportunities, and incentives, to engage in ‘opportunistic behaviour’. This section will consider the theory of the firm as it is presented in standard economic analysis. The simplest kinds of neoclassical firm maximise