The Growth Objective Can Be Negative for a Firm

question 20

Multiple Choice

The growth objective can be negative for a firm. Why?

• A)A mature market could lead managers to invest profits in diversifying, rather than return the value to shareholders to invest elsewhere themselves
• B)Top managers may have an incentive to grow the firm at the expense of long-term profits and shareholder interests
• C)Even without diversification, sales maximisation does not usually lead to profit maximisation
• D)All of the above

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Definitions:

Professionalism

Entails the conduct, aims, or qualities that characterize or mark a profession or a professional person.

Labeling

The process of assigning a descriptor or category to individuals or groups which can influence how they are perceived and act.

Power Play

A strategic move or action taken by an individual or group to consolidate, assert, or increase their influence or control over others.

Screening

Screening involves the process of evaluating or testing individuals or groups to identify certain characteristics or disorders early on.