Explanation: the Monitoring Problem Arises When Employees' Goals Do Not

question 77

Multiple Choice

Explanation: The monitoring problem arises when employees' goals do not match the goals of owners of a firm. Since managers can influence the level of their pay, a monitoring problem can result in firms giving exorbitant pay to managers.
Difficulty: 2 Medium
Topic: Incentives and Monitoring Costs
Learning Objective: 16-02 Discuss why competition should be seen as a process, not a state.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
-The fact that U.S. managers' salaries are substantially higher than the salaries of comparable managers in Japan may be related to the fact that:

• A) the demand for CEOs has decreased.
• B) the supply of CEOs has decreased.
• C) there are no government controls on CEOs' earnings in the United States.
• D) there are more natural monopolies in the United States.

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Definitions:

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Communications designed to promote or sell products or services through digital platforms.

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Targeted written communications sent to individuals through postal or electronic means to promote a product or service.

Organizational Strategy

A plan of action designed to achieve long-term or overall aims and objectives of an organization.

Rational Appeal

A strategy in persuasive communication that uses logical arguments and evidence to convince others of a particular point of view.