Management Memo - Matthew Fox Memo 3 On February 19th we...

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Matthew Fox Memo 3 On February 19 th , we learned about the separations between private ownership and control. We talked about different kids of debt, both long and short term, and how they are influenced by a variety of market issues. We talked about the importance of the Board in running a company. Even though the Board is elected by shareholders, most investors engage in social loafing and do not participate in making decisions. On February 21 st , we learned about the importance of understanding human nature. We introduced the moral hazard of social loafing, citing an article that talked about group clapping. People are more influenced by personal incentives than group incentives. Social loafing, aka free-riding, occurs most often when one person’s input influences another’s output. We ended class by talking about different incentives that can be found in the business world. On February 26 th we learned about social norms in markets. We talked about the Kula rings, and the problems inherent in such an exchange. However, one of the merits of
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Management Memo - Matthew Fox Memo 3 On February 19th we...

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