The M-Form Structure Is Designed to Create Checks and Balances

question 25

True/False

The M-form structure is designed to create checks and balances for managers that increase the probability that a diversified firm will be managed in ways consistent with the interests of its equity holders.

---

Definitions:

Management

The process of directing, controlling, and organizing resources in an organization towards achieving its goals.

Inventoriable Costs

Costs that are initially recorded as inventory on the balance sheet and recognized as cost of goods sold only when the inventory is sold.

Freight Charges

Costs associated with transporting goods from one location to another, often incurred by the seller to deliver goods to a customer.

Purchase Returns

Goods returned by the buyer to the seller, usually due to defects or otherwise not meeting expectations, resulting in a refund or credit.