Asked by Lytzy Saenz-Torres on Sep 24, 2024
Verified
A payday loan company has decided to open several new locations in the city.To decide where to open these locations it hires consultants and must decide how to pay them.To align incentives,it should to pay the consultants
A) Per store opened
B) A percentage of the profit earned per new store
C) A fixed contract amount
D) All of the above
Payday Loan
A short-term, high-interest loan, typically due on the borrower's next payday.
Incentives
Benefits, rewards, or cost-saving measures provided to encourage specific actions or behaviors from individuals or organizations.
Consultants
Professionals who provide expert advice and strategies in a specific area, often to improve an organization's performance.
- Learn to appreciate the strategy of harmonizing the rewards for the organization and its consultants or sales representatives.
Verified Answer
SC
sushmita chauhan1 day ago
Final Answer :
B
Explanation :
Paying the consultants a percentage of the profit earned per new store aligns their incentives with the long-term success of the company. It encourages them to choose locations carefully and make sure they are profitable in the long run, rather than just focusing on opening as many stores as possible. This method also ensures that the consultants are rewarded for their expertise and successful decision-making.
Learning Objectives
- Learn to appreciate the strategy of harmonizing the rewards for the organization and its consultants or sales representatives.