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23 February, 08:56

Amos Ball, Inc., is a printing company in the Southern New Jersey that has been family owned and managed for three generations. Which of the following statements is most likely to be TRUE?

a. The function of risk-bearing and decision making are separate at Amos Ball.

b. If all things are equal, Amos Ball whose CEO is a family member will perform better a firm that has a non-family CEO.

c. At Amos Ball, the occurrence of managerial opportunism is highly likely.

d. Agency costs at Amos Ball are high

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  1. 23 February, 08:58
    0
    B) If all things are equal, Amos Ball whose CEO is a family member will perform better THAN a firm that has a non-family CEO.

    Explanation:

    When researchers have studied performance of family businesses, they usually reach the same conclusion, the company will work better if a family member is the CEO or manager. This conclusion applies only to family businesses, big and small, but not to corporations.

    Probably this occurs because family businesses tend to operate in a different way since the relationships between the members of the organization are different. The whole organization tends to behave as one big family and their problems are different also, therefore it is useful to have a CEO that understands "family" relationships.
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