Sidney Featherstone of TIP Inc. is the owner and CEO of the company. He has made the company successful through his decision making over the years. This year he decided to retire and move to Costa Rica. He does not intend to change any aspects of decision making, rewards, or performance evaluation in TIP Inc. What is likely to happen to TIP? Why?
What will be an ideal response?
It is likely to perform poorly, at least in the short run. Under Featherstone, decision making was highly centralized. The fact that the company was successful implies that Featherstone possessed specific knowledge to make value-enhancing decisions. Unfortunately, other managers may not have the necessary specific knowledge or the decision-making skills they will need going forward.
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If the price of iPods decreases,
A) there will be a movement up along the supply curve for iPods. B) there will be a rightward shift in the iPod supply curve. C) the supply curve for iPods shifts leftward. D) there has been a decrease in the price of iTunes songs. E) there will be a movement down along the supply curve for iPods.
An advantage of a consumption tax over the present tax system is that a consumption tax
a. raises more revenues. b. would save the government millions in administrative costs. c. places more of the tax burden on the wealthy. d. does not discourage saving.
In a self-regulating economy, a recessionary gap will be eliminated by falling wages which will shift the SRAS curve to the right
Indicate whether the statement is true or false
The marginal rate of substitution is
A. equal to unit changes in the quantities of both goods so that utility rises. B. found by adding additional units. C. the slope of the budget line at all points. D. the change in the quantity of one good that just offsets a unit change in another good, keeping utility constant.