Why Are Some Managers Thought to Engage in Empire Building

question 51

Multiple Choice

Why are some managers thought to engage in empire building?

• A) Growth results in large company size, and large size satisfies managers' needs for power, status, income, and job security.
• B) The pursuit of growth represents the best way of maximizing the long-run profitability of the company.
• C) Growth is designed to increase market share, which in turn increases company profits.
• D) Companies that do not grow stagnate.
• E) Stockholders would rather invest in large companies than in small ones.

---

Definitions:

Retained Earnings Statement

A summary of the changes in the retained earnings in a corporation that have occurred during a specific period of time, such as a month or a year.

Income Statement

A financial report summarizing a company's revenues, expenses, and profit over a specific period, giving insight into its operational profitability.

Treasury Stock

Shares that were issued and subsequently repurchased by the issuing company, reducing the amount of outstanding stock.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period of time, resulting in net income or loss.