Which of the Following Statements Regarding Efficiency Gains Is False

question 2

Multiple Choice

Which of the following statements regarding efficiency gains is false?

• A) Takeovers relying on the improvement of target management are difficult to complete, and post-takeover resistance to change can be great. Thus not all inefficiently run organizations are necessarily more efficient following a takeover.
• B) Although identifying poorly performing corporations is relatively easy, fixing them is another matter entirely.
• C) A justification that acquirers cite for paying a premium for a target is efficiency gains, which are often achieved through an elimination of duplication.
• D) A chief executive of an inefficiently run corporation can be ousted by current shareholders voting to replace the board of directors, and in fact a large number of ineffective managers are replaced in this way.

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Definitions:

Professionalism

The conduct, behavior, and attitude deemed appropriate and expected from someone in a professional setting.

Bureaucracy

A system of administration marked by officialism, red tape, and a clear hierarchy, often used in large organizations and government.

Achievement

The accomplishment of a goal or the attainment of success, often recognized or celebrated.

Goal Displacement

A phenomenon where the original objectives of an entity are overshadowed by new, sometimes unrelated aims.