What Would You Do

question 17

Multiple Choice

What Would You Do?
Imagine that you are the head of a company that manufactures secondary wood products for the construction industry.Recently, there have been many reports of a plywood subflooring product that has been failing in a number of commercial locations resulting in several complaints about ruined floor coverings and, in one instance, partial collapse of a third floor, which injured three people.Your head of research and development has asked you to stop selling the product and wants to run tests on the product to determine the problem.However, third-quarter earnings reports are due out in two weeks and public knowledge of problems with a lucrative product may delay the financing of the company's expansion plans and also lower stock price.Your dilemma: Do you delay or refuse the product research, thereby enhancing the expansion plans but risking other damage and public safety, or do you immediately stop sales of the product and run the necessary tests, thereby risking the expansion plans?
-Refer to What Would You Do? (Scenario) .Friedman would argue that if you decided to make any decision other than what is in the best interest of the shareholders, which of the following is likely to occur?

Definitions:

Legal Formation

The process of establishing a business or organization within the framework of legal regulations, including incorporation, partnership formation, etc.

Labor Unions

Organizations formed by workers to protect their rights, improve working conditions, negotiate wages, and address grievances with employers.

Human Relations Movement

An approach to management focusing on the social aspects of work and the importance of employee needs, motivation, and relationships for productivity.

Scientific Management

A management theory that applies scientific methods and principles to the administration of businesses or organizations to increase efficiency.