Under the Shareholder Wealth Maximization Model (SWM) of Corporate Governance

question 68

Multiple Choice

Under the Shareholder Wealth Maximization Model (SWM) of corporate governance, poor firm performance is likely to be faced with all but which of the following?

• A) sale of shares by disgruntled current shareholders
• B) shareholder activism to attempt a change in current management
• C) as a maximum threat, initiation of a corporate takeover
• D) prison time for executive management

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Definitions:

Bureaucratic

Referring to a system of administration marked by strict policies, procedures, and hierarchy, often leading to delays and inflexibility.

Organic

A form of organizational structure characterized by flexibility, decentralized decision-making, and a broad scope of operations.

Decentralized

Describes organizations or systems where decision-making powers are distributed among various levels or departments rather than being concentrated in a single point of authority.

Span Of Control

The number of subordinates that a manager or supervisor can effectively oversee, control, or manage directly.