A Company's Board of Directors Chooses to Provide a Comprehensive

question 86

Multiple Choice

A company's board of directors chooses to provide a comprehensive health care plan for the families of all employees, despite the large cost. They argue that this will not only increase the number of employees who stay with the firm, and thus reduce some costs involved in employee turnover, but also increase the employees' diligence and industry. What general principle is being argued by the board of directors?

• A) In a conflict between stakeholders in a company, the most important stakeholder is not always the stockholders.
• B) Some activities that decrease shareholders' wealth may have intangible benefits which increase the strength of the company overall.
• C) When a conflict of interest arises between shareholders and other stakeholders, in general, the correct solution is the one that creates the greatest good for the greatest number of stakeholders.
• D) Ethical decisions should be assessed on their moral value, not on their value in dollars and cents.

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Definitions:

Price Floor

A government-imposed minimum price charged for a commodity, preventing prices from falling below that level to protect producers.

Competitive Market

A market structure characterized by many buyers and sellers, none of whom can influence the market price on their own.

Market for Human Organs

The controversial concept or practice involving the buying and selling of human organs for transplantation, often debated for ethical and moral reasons.

Volunteer-Donor System

A system in which goods, services, or time are given by volunteers or donors without financial compensation.