Raj, a Student of Business Management, Claims That the Shareholder

question 52

Multiple Choice

Raj, a student of business management, claims that the shareholder primacy model is not a good model of business management. Which of the following statements should he use in order to best support his claim?

• A)The shareholders are not the legal owners of the corporation's assets.
• B)Financial capital is the most important input into making a business successful.
• C)The shareholders cannot not trade or own any stock of the corporation.
• D)Managing for shareholder value creates negative consequences for firms.

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Definitions:

Innovation

The process of creating new ideas, products, or methods, which improve upon the existing standards and contribute to progress.

Survival

The act of continuing to live or exist, often despite hardship or danger.

Formalization

The extent to which an organization uses rules, procedures, and standardized processes to govern behaviors and decisions within the organization.

Innovative Unit

A dedicated group or department within an organization that focuses on developing new ideas or projects which can lead to innovation.