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Agency problems, as explained in the book 'Strategy Beyond the Hockey Stick', refer to the conflicts that arise due to the misalignment between the interests of management and other stakeholders. These problems occur when the people in charge (the agents) make decisions that are not in the best interest of those they represent (the principals), such as shareholders or employees. This misalignment can lead to issues like information asymmetry, where the agents have more information than the principals, and moral hazard, where the agents take undue risks because they do not bear the full consequences of their actions. These problems can hinder the effective implementation of strategic decisions and negatively impact the overall performance of the organization.
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Social games are played because of people's egos, status, and the resources they get; and careers depend on how they present their growth strategy. Strategy is challenging because it deals with low-frequency, high-uncertainty problems that are prone to cognitive biases. Further, there are agency problems that arise due to misalignment between management and other stakeholders. Some of them are:
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McKinsey & Co. partners wrote this book. How do you effectively turn the promises of strategy meetings into reality? How can you manage social dynamic...
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