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Demonstrate how economic theory contributes to strategic managerial decision-making.
Oil Company X is a large oil refinery which has been expanding and taking on new investment projects. Recently, they have considered building a pipeline that stretches across the United States, from Canada to New Orleans.
The Board is in the process of hiring a new CEO for the firm. They are concerned about the problem of moral hazard and want to know how they can reduce or eliminate this via contract. They have tasked you, a team member in the Cost Department, with analyzing the following possible payment systems for the new CEO:
You will create a presentation detailing the pros and cons of each potential payment system, including a final recommendation. Be sure to explain whether the firm or the CEO will bear all risk, or if they split the risk with each contract.
Record a presentation as if explaining this to the Board. There are many free screen recording software/Webware options available (such as Screencast-O-Matic) to use in presenting your PowerPoint. Make sure that both your voiced narration and the PowerPoint slides are captured during your screen recording.
After recording, paste a link to the recording on the last slide of the PowerPoint presentation. You will submit the PowerPoint in the Drop Box.
Format your PowerPoint to include a title page, introduction, body slides, conclusion, and references. Remember to cite your sources using correct APA format, and also use correct grammar, spelling, and formatting.
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