What Happens When the Process by Which Governance Develops Exhibits

question 5

Multiple Choice

What happens when the process by which governance develops exhibits path dependence?

• A)Governance arrangements split decision rights and controls between two related firms
• B)Governance arrangements are optimal
• C)Past circumstances could exclude certain possible governance arrangements in the future
• D)The firm will split into two entities to reduce the governance issues created
• E)The governance will form effectively

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Definitions:

American Law Institute

An independent organization in the United States that produces scholarly work to clarify, modernize, and otherwise improve the law.

Common Law

A body of legal principles derived from judicial decisions of courts and similar tribunals, as opposed to statutes or written legislation.

Justice

The principle of fairness and the ideal of moral equity, often embodied in the legal system's attempt to uphold rights and punish wrongdoing.

Chancellor

A senior official in many educational institutions or a high-ranking government official in certain countries.