A Company's Board of Directors Chooses to Provide a Comprehensive

question 9

Multiple Choice

A company's board of directors chooses to provide a comprehensive health care plan for the families of all employees,despite the large cost.They argue that this will not only increase the number of employees who stay with the firm,and thus reduce some costs involved in employee turnover,but also increase the employees' diligence and industry.What general principle is being argued by the board of directors?

• A)In a conflict between stakeholders in a company,the most important stakeholder is not always the stockholders.
• B)Some activities that decrease shareholders' wealth may have intangible benefits which increase the strength of the company overall.
• C)When a conflict of interest arises between shareholders and other stakeholders,in general,the correct solution is the one that creates the greatest good for the greatest number of stakeholders.
• D)Ethical decisions should be assessed on their moral value,not on their value in dollars and cents.
• E)Decisions involving employees must take fairness into account.

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Definitions:

Coordination

The management of interdependencies between activities, tasks, and functions to achieve a harmonious operation and aligned efforts towards common goals.

Economies of Scale

Financial benefits gained by companies thanks to their large scale of operation, which typically leads to a reduction in the cost per unit of output as the scale increases.

Product Departmentation

A method of organizing a company based on the different products manufactured or services provided.

Functional Departmentation

The process of organizing a business into distinct departments, each responsible for a specific function or area, such as marketing or finance.