Strategic Management
4th Edition
ISBN: 9781259927621
Author: Frank T. Rothaermel The Nancy and Russell McDonough Chair; Professor of Strategy and Sloan Industry Studies Fellow
Publisher: McGraw-Hill Education
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Question
Chapter 12, Problem 1DQ
Summary Introduction
To determine: The ways by which a top management can reduce the chances of their key managers pursuing their own self-interest at the cost of stockholders, employees and other stakeholders.
Expert Solution & Answer
Explanation of Solution
Ways by which a top management can reduce the chances of their key managers pursuing their own self-interest at the cost of stockholders, employees and other stakeholders:
A company can use a strict corporate governance mechanism to watch their key managers getting involved in inappropriate actions. Monitor mechanism must be strictly implemented and must be communicated to avoid the unnecessary behavior. Code of conduct policies must be communicated throughout the organization by which unwanted behavior can be avoided.
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