Which of the following is an outside incentive that forces managers to put forth maximal effort?

Question

Quizplus · Accepted Answer

The threat of takeovers is an outside incentive that forces managers to put forth maximal effort. This is because if managers do not perform well, the company's stock price may fall, making it attractive to potential acquirers. Therefore, the threat of takeovers can motivate managers to work harder to improve the company's financial performance and increase its stock price. Revenue sharing contracts and performance bonuses are both examples of inside incentives, as they are negotiated and agreed upon between managers and the company. Flat fees do not provide any additional incentive for managers to perform well.

Which of the Following Is an Outside Incentive That Forces