What Is the Problem with Paying Plant Managers in Multi-Plant

question 102

Multiple Choice

What is the problem with paying plant managers in multi-plant firms according to the level of output they produce?

• A) Managers in low-cost or high-capacity plants could be penalized, in percentage terms, for their overproduction.
• B) The production problem in multi-plant firms is usually how to lower production to increase market power, not how to increase production.
• C) Managers in high-cost or low-capacity plants could be penalized for production constraints over which they have no control.
• D) Managers would have an incentive to understate the productive capacity of their plants.
• E) Managers would have an incentive to overstate the productive capacity of their plants.

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Definitions:

Neglecting Satisfaction

The state of disregarding or ignoring the contentment and fulfillment derived from an activity or job.

Excessive Hours

Working time that significantly surpasses normal or legally permitted hours, potentially leading to health risks or work-life imbalance.

Emotional Intelligence

The ability to accurately perceive emotions, to understand the signals that emotions send about relationships, and to manage your own and others’ emotions.

Control Temper

The ability to regulate and manage one's emotions, especially anger, in a constructive manner.