How does equity theory explain how workers are likely to interpret the high pay of CEOs?
What will be an ideal response?
The issue of executive pay is relevant to pay structure in terms of equity theory. By many comparisons, U.S. CEOs' pay is high. A study by the research and analytics firm MSCI found that among makers of consumer staples, such as food and personal-care products, the highest-paid executive made 123 times more than the average worker in that industry. To assess the fairness of this ratio, equity theory would consider not only the size of executive pay relative to pay for other employees but also the amount the CEOs contribute. An organization's executives potentially have a much greater effect on the organization's performance than its lowest-paid employees have. But if they do not seem to contribute 123 times more, employees will see the compensation as unfair. In a study comparing the pay of rank-and-file employees with executives in various business units, customer satisfaction was lower in units where the difference in pay was greater. The researchers speculated that employees thought pay was inequitable and adjusted their pay to provide lower inputs by putting forth less effort to satisfy customers.
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An accountant may not disclose the contents of his working papers under any circumstances
a. True b. False Indicate whether the statement is true or false
In effect, the cash budget simply restates the budgeted income statement to the cash basis.
Answer the following statement true (T) or false (F)
Which of the following statements is FALSE?
A) While debt itself may be cheap, it increases the risk and therefore the cost of capital of the firm's equity. B) Although debt does not have a lower cost of capital than equity, we can consider this cost in isolation. C) We can use MM Proposition I to derive an explicit relationship between leverage and the equity cost of capital. D) The total market value of the firm's securities is equal to the market value of its assets, whether the firm is unlevered or levered.
All of the following statements correctly describe a contemporary approach to create the Work Breakdown Structure (WBS) for a project EXCEPT:
a. Project teams may adopt a top-down approach to construct the WBS. b. Project teams may rely upon a WBS from a previous project as a starting point. c. Project teams may rely upon the project manager to create the entire WBS d. Project teams may jump start the effort with a brainstorming session.