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Bobby’s Burgers is a large restaurant chain with nearly 10,000 units
worldwide. It is experiencing incentive problems among its outlet
managers. The managers are not working very hard and are letting quality
deteriorate at their units. CEO, Bobby Jones, is considering a stock
plan where each unit manager would be given 500 shares of stock in
Bobby’s Burgers. He reasons that making the managers part owners of the
company will motivate better service.
1. Critically evaluate the proposed stock plan.
2. Discuss other ways that Bobby Jones might motivate increased effort at the units.
