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Discussion - 1 Discuss the owner-manager conflict within...

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1. Discuss the owner-manager conflict within the firm. Provide two real-world manifestations of the conflict. Our textbook outlines at least five possible sources of conflict that can arise between owners and managers they are: choice of effort, perquisite taking, differential risk exposure, differential horizons, and overinvestment. In my opinion most common conflict would be overinvestment, since managers will become involved with employees what is occurring in their life they are reluctant to lay off colleagues due to establishing a personal relationship for fear of a loss of friendship. The next most common type of conflict would most likely be differential horizons; since once an individual feels they have reached a wall in the company where they can no longer advance or gain more incentives they will be less inclined to work towards the best interest of the company. An owner on the other hand is interested in the company’s future and its continued ability to turn a profit.
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