The Problem with the Separation of Ownership from Control Is

question 176

Multiple Choice

The problem with the separation of ownership from control is that

• A) the owner in a proprietorship may not always act in the profit-maximizing fashion because he or she may not have the experience or expertise that professional managers have.
• B) the managing partner of a firm may not always behave in the way that other managers would if they were the managing partners.
• C) the managers of the firm can make decisions that reduce the wealth of the owners while not reducing their own wealth.
• D) the owners of firms may not always know the best way to run a firm, yet they are the ones who elect the managers of the firm.

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Definitions:

Entrepreneurship

The act of creating, designing, launching, and running a new business, often starting as a small business or startup, with the aim of profit and growth.

Special Set

A unique group or collection of items or elements that have specific characteristics distinguishing them from others.

Intrapreneurship

The practice of developing new products, services, or initiatives within an existing organization to drive innovation.

Renewal

The process of extending the period of validity or effectiveness of something, or revitalizing something that has diminished or expired.