Managers of MNCs may attempt to expand their divisions internationally if their compensation may be increased as a result of expansion. This goal is consistent with the goals of shareholders. True False

Question

Ayana Kirk

Business

11 January, 09:35

Managers of MNCs may attempt to expand their divisions internationally if their compensation may be increased as a result of expansion. This goal is consistent with the goals of shareholders. True False

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Answers (1)

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Kyler Chandler · Answer 1

True

Explanation:

There is always a conflict of interest between Management and Shareholders. The Managers Interest if to increase their remunerations and Shareholders interest is to have maximum return from the business. An increase in remuneration will result in the reduction of shareholder's return in the form of expense. In this cash the business is going to expand internationally which will create new opportunities for the business. The Increase in in compensations of manager will result in increase in return as well. The manager will try to target the potential market and make the expansion succesful to be compensated more. So, goal is consistent with the goals of shareholders.