According to Stanford's Business Guru Jeffery Pfeffer,"the Best Companies Build

question 91

Multiple Choice

According to Stanford's business guru Jeffery Pfeffer,"the best companies build cultures in which frontline people ________."

• A) can refer serious problems to senior management
• B) have strictly limited freedom to deviate from standard operating procedures
• C) are also consumers of the company's products
• D) are empowered to do what's needed to take care of the customer
• E) live in the communities they serve

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Definitions:

Moral Hazard Problem

A situation in which one party engages in risky behavior knowing that it is protected against the consequences, usually by insurance or other safety nets.

Financially Distressed Banks

Financially distressed banks are financial institutions experiencing significant financial difficulties, potentially leading to insolvency or the need for external financial assistance.

Risky Projects

Initiatives or investments that have a significant chance of failure or result in negative outcomes but also offer potential high rewards.

Moral Hazard

Moral hazard refers to a situation where one party is more likely to take risks because they do not have to bear the full consequences of their actions, often due to asymmetrical information or a disconnect between action and responsibility.