a firm's owner is better able than the sales staff tobear the risk of a recession, weak incentives:
A)are worse than strong incentives.
B)may be mutually profitable.
C)should not be used.
D)would not be profitable.

Question

Quizplus · Accepted Answer

If the owner bears the risk of a recession, it means they have a greater stake in the success of the firm and they are more likely to take actions to ensure the firm's survival during tough times. Weak incentives for the sales staff may not necessarily be worse than strong incentives if the sales staff is already performing well and the firm is not in danger of going under. In this case, mutually profitable arrangements may still be possible between the owner and the sales staff, such as a profit-sharing plan or commission structure that incentivizes long-term success. Using no incentives at all (i.e. not offering any rewards for good performance) is also not advisable, as it can demotivate the sales staff and ultimately hurt the firm's bottom line.

A Firm's Owner Is Better Able Than the Sales Staff