This topic contains a solution. Click here to go to the answer

Author Question: Describe the various reasons due to which managers may follow goals that promote their own interests ... (Read 85 times)

cabate

  • Hero Member
  • *****
  • Posts: 537
Describe the various reasons due to which managers may follow goals that promote their own interests and not the interests of shareholders.
 
  What will be an ideal response?

Question 2

Another term for laboratory learning is _____.
 
  a. encounter groups
  b. Johari Window
  c. wellness program
  d. Transactional Analysis
  e. meditation



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

alexisweber49

  • Sr. Member
  • ****
  • Posts: 311
Answer to Question 1

When shareholders delegate to managers the right to coordinate and use organizational skills and resources, a divorce of ownership and control occurs. Although in theory managers are the employees of shareholders, in practice because managers have control over organizational resources, they have real control over the company even though shareholders own it. The result is that managers may follow goals that promote their own interests and not the interests of shareholders.

An attempt to maximize stockholder wealth may involve taking risks into uncharted territory and making capital investments in R&D that may bear fruit only in the long term as new inventions and discoveries generate new products and a stream of new revenues. Managers, however, may prefer to maximize short-term profits because that is the goal on which they are evaluated by their peers and by stock market analysts who do not take the long-term view.
Also, because managers' salaries are closely correlated with organizational size, managers may prefer to pursue low-risk strategies even though these may not maximize return on invested capital.

Answer to Question 2

a




cabate

  • Member
  • Posts: 537
Reply 2 on: Jul 7, 2018
:D TYSM


alvinum

  • Member
  • Posts: 317
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

Did you know?

Most strokes are caused when blood clots move to a blood vessel in the brain and block blood flow to that area. Thrombolytic therapy can be used to dissolve the clot quickly. If given within 3 hours of the first stroke symptoms, this therapy can help limit stroke damage and disability.

Did you know?

To combat osteoporosis, changes in lifestyle and diet are recommended. At-risk patients should include 1,200 to 1,500 mg of calcium daily either via dietary means or with supplements.

Did you know?

The modern decimal position system was the invention of the Hindus (around 800 AD), involving the placing of numerals to indicate their value (units, tens, hundreds, and so on).

Did you know?

The oldest recorded age was 122. Madame Jeanne Calment was born in France in 1875 and died in 1997. She was a vegetarian and loved olive oil, port wine, and chocolate.

Did you know?

The training of an anesthesiologist typically requires four years of college, 4 years of medical school, 1 year of internship, and 3 years of residency.

For a complete list of videos, visit our video library