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 75 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
Great answer, keep it coming :)


bigsis44

  • Member
  • Posts: 317
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

The heart is located in the center of the chest, with part of it tipped slightly so that it taps against the left side of the chest.

Did you know?

Vaccines prevent between 2.5 and 4 million deaths every year.

Did you know?

HIV testing reach is still limited. An estimated 40% of people with HIV (more than 14 million) remain undiagnosed and do not know their infection status.

Did you know?

Human stomach acid is strong enough to dissolve small pieces of metal such as razor blades or staples.

Did you know?

Patients who have undergone chemotherapy for the treatment of cancer often complain of a lack of mental focus; memory loss; and a general diminution in abilities such as multitasking, attention span, and general mental agility.

For a complete list of videos, visit our video library