Critical Perspectives on Management

Professor Rolf Strom-Olsen

THIS IS NOT AN ASSIGNMENT THESE QUESTIONS
ARE FOR STUDY PURPOSES ONLY

Week 2 Study Questions: Lessons from Rome (II)

The questions below are designed to help you think through ideas that are both directly
and indirectly implicated by the reading. Note that not all the topics below will be
discussed in the lecture.

1. What is an agency cost? What are some specific examples of agency costs that you can
think of?

2. How does the experience of the Roman firm help clarify the problems in the modern
firm of: agency costs; trust; decision-making (adverse selection); accountability (moral
hazard).

3. Many firms today allow their employees to telecommute (work from home). What
problems does this create? What benefits? Overall, is it beneficial to the firm?

4. A firm can be considered in its basic form as a hierarchically organised institution. As
such, are agency costs inevitable? Are there ways to eliminate entirely agency costs?

5. What is meant by reputation mechanism? What examples can you think of in which
the reputation mechanism serves as constraint and/or incentive?

6. Given what we have learned about how the Roman grain trade worked, what role did
confidence have in keeping the market functioning?