Provide an economic critique of the statement "U.S. corporate governance is overly focused on shareholders at the expense of employees and other corporate stakeholders."
What will be an ideal response?
Models that focus on satisfying multiple stakeholders don't provide adequate incentives to employees and other corporate stakeholders. Satisfying these other stakeholders may take place at the expense of shareholders, reducing the value of the firm and making it less competitive in the marketplace, thereby reducing profit. By focusing on the shareholders, many companies avoid this tradeoff. More efficient companies would be able to reward their employees based on their high productivity. More profitable companies will more likely survive and less likely lay off employees. In addition, when shareholders reap greater rewards, they will be better able to satisfy their own altruistic preferences.
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The tax deductibility of employer-provided health insurance is a primary factor in the spread of health insurance during the latter half of the twentieth century
a. True b. False
A decrease in federal income tax rates is an example of fiscal policy that affects GDP through consumption adjustments
a. True b. False Indicate whether the statement is true or false
A cartel will break down more easily if
A) there are only a few members. B) industry demand is very stable. C) market prices can be observed easily. D) there are many entrants in the industry.
If the absolute price elasticity of demand is 2, a 10 percent increase in the price will cause
A. the quantity demanded to decrease by 2 percent. B. the quantity demanded to decrease by 20 percent. C. the quantity demanded to decrease by 50 percent. D. the quantity demanded to decrease by 5 percent.