In Addition to Its Use to Attract and Hold Key

question 49

Multiple Choice

In addition to its use to attract and hold key personnel, ESOPs can also:

• A)allow employees to veto management decisions.
• B)give employees a share of liability.
• C)give owners a way to cash out of the business.
• D)provide an incentive for managers to reduce labour costs.

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Definitions:

Family Members

Individuals related by blood, marriage, or adoption who share a significant relational bond.

Social Exchange Theory

Proposes that people seek through their interactions to maximize their rewards and minimize their costs.

Maximize Rewards

A principle often found in social exchange theory, suggesting individuals seek to enter relationships that provide the greatest benefits with the least costs.

Minimize Costs

Refers to the process of reducing expenses or outlays in order to achieve financial efficiency or budgetary goals.