Refuge Nursing Homes, Inc., (RNH) has been highly profitable in the past 10 years, providing its investors returns in excess of direct competitors. RNH has a reputation for providing high-paying managerial and hourly-employee jobs. However, recent investigations have revealed that the nursing home residents have been provided substandard care, including non-nutritious and unappetizing meals, non-functional medical equipment, and inadequate patient-care staffing. Which statement best describes the situation?

Question

Quizplus · Accepted Answer

The situation describes a prioritization of the demands of capital market stakeholders (investors) over the demands of product market stakeholders (nursing home residents). This is reflected in the high profits and high-paying jobs for managerial and hourly employees, but substandard care for the residents. RNH may have earned above-average returns, but this does not necessarily mean that it has satisfied the needs of all relevant stakeholders. Option A is incorrect because the situation describes high profits and prioritization of investor demands. Option C is incorrect because the situation indicates substandard care for patients. Option D is incorrect because the situation shows a clear prioritization of investor demands over the needs of the nursing home residents.