SMG SM 131 Midterm: SM131 Exam 1 Comprehensive Review Guide
16 Feb 2017
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3. adverse selection: you know something that the other doesn"t and you use that information to their detriment. Any type of business for can be certi ed. 5. board of directors: governance and oversight: duty of loyalty: represent interest of owners, duty of care: understand the company, exercise business judgement: use experience, hire and fire ceo: most important role. Financial institutions put together home buyers (who wanted loans called mortgages to buy their homes) with the investors who wanted higher returns. 8. constituency laws: a state law that says companies must take employees, community and environment into consideration when making decisions. 9. corporate social responsibility: actions that go beyond what the law requires to encourage positive social impact. 10. creating shared value: policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the community in which it operates. Thinks that managerial capitalism is short sighted because it doesn"t take public life into account.
