In February 2013, Yahoo CEO Marissa Mayer famously announced that employees would no longer be allowed to work from home. “Speed and quality are often sacrificed when we work from home,” an internal memo read. “We need to be one Yahoo!, and that starts from being physically together.”

Could the speed and quality issues referenced in the internal memo be manifestations of agency problems? If so, what are the differences in objectives between the firm and its employees, and how does working from home limit the firm’s ability to control these agency problems? How is this change likely to affect how well the employees like their jobs?