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HoffmannDiscount Drugs Case Summary: The case illustrates a different method of dealing with uncontrollability problems. This company makes adjustments foruncontrollablesonly if they are larger than

HoffmannDiscount Drugs

Case Summary:

The case illustrates a different method of dealing with uncontrollability problems. This company makes adjustments foruncontrollablesonly if they are larger than apre-set threshold level through a type of ad hoc variance analysis performed by corporate managers. The store managers must bear the full risk of all small things.

Case Questions:

  1. Evaluate the HDDI Store Management Bonus Plan. What, if anything would you change? Explain.
  2. What behavioral issues are associated with asking others to bear the risk for uncontrollable events?

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