Managerial entrenchment means that managers ________ and run the firm for their own best interests.
A) may face little threat of being fired
B) are overseen by equity holders
C) are overseen by debt holders
D) are well compensated

Question

Quizplus · Accepted Answer

Managerial entrenchment refers to the situation where managers become too powerful or entrenched, and as a result, they are less likely to be held accountable for their actions or decisions. This can happen when managers face little threat of being fired or replaced, and they may run the firm for their own benefit rather than for the benefit of shareholders or other stakeholders. Therefore, choice A, which suggests that managers may face little threat of being fired, is the best answer. The other options may not necessarily lead to managerial entrenchment.

Managerial Entrenchment Means That Managers ________ and Run the Firm