When a firm is under-managed,
A) the market forces will be unable to identify this, and the firm's share price will remain strong.
B) nobody can do nothing since management controls the corporation.
C) market forces expose this weakness and allow for corrective action to be taken.
D) generally there is nothing shareholders can do.

Question

Quizplus · Accepted Answer

Market forces expose the weakness of under-management in the form of poor financial performance, lower market share, and lower profitability. This makes it easier for corrective action, such as replacing or restructuring management, to be taken.

When a Firm Is Under-Managed