What Did Henri Fayol Mean When He Argued That "The

question 103

Essay

What did Henri Fayol mean when he argued that "the success of an enterprise generally depends much more on the administrative ability of its leaders than on their technical ability"?

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Definitions:

Security Market Line

A graphical representation in the Capital Asset Pricing Model that shows the relationship between the expected return of an investment and its beta, representing risk.

APT

Stands for Arbitrage Pricing Theory, a model that predicts a security's returns using the linear relationship between its expected return and macroeconomic factors.

Factor Intensity

The measure of how much of a certain factor of production (labor, capital, etc.) is used in the production of a good or service.

APT Model

Arbitrage Pricing Theory Model, an alternative to the Capital Asset Pricing Model (CAPM), asserts that the expected return of a financial asset can be modeled as a linear function of various macro-economic factors or theoretical market indexes.