Moral Hazard Means That as a Firm Grows and Adds

question 30

True/False

Moral hazard means that as a firm grows and adds personnel, the new hires typically do not have the same ownership incentives as the original founders, so the new hires may not be as motivated as the founders to put in long hours or may even try to avoid hard work.

Identify and describe the characteristics and examples of sweatshops.

Recognize the role and challenges of transnational corporations in the global market.

Understand the ethical concerns in international business, including corruption and cultural intelligence.

Comprehend the legal framework affecting international business practices, such as the Foreign Corrupt Practices Act.

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Definitions:

Motivational Arousal

The process of being internally stimulated to perform an action or behavior due to personal drive or desire.

Physiological Needs

Basic life needs required for human survival, such as air, water, food, shelter, and sleep, according to Maslow's hierarchy of needs.

Drive-Reduction Theory

A psychological concept proposing that the motivation of behavior is the reduction of drives, which are primarily biological needs that trigger arousal.

Aroused State

A condition of heightened physiological and psychological activity, with increased heart rate, alertness, and energy, often triggered by excitement or stress.