ABSTRACT
Agency theory is often used as a tool in managerial research, with results providing qualitative recommendations for practice and serving as a foundation for empirical research. Especially popular are models assuming contract linearity, exponential utility, and normal distribution of results (LEN), as they ameliorate the solvability of complex models. Unfortunately, there exist only a few structured case studies, guiding through problem-solving within such models. The present case study aims to broaden this scope, with the organization and incentivization of risk management chosen as an exemplary problem, and enhances the ability to transfer practical problems into LEN models. The solution is presented step by step, the results are qualitatively interpreted based on comparative statics and figures, and limitations are discussed. This approach addresses the needs of academic researchers aiming to broaden their methodological scope, students starting their research projects, and practitioners interested in a better understanding of scientific research outcomes.
