Conflict, so inevitable in the operations of businesses, may emanate from decisions taken to run the course of business. This conflict is, almost and always, associated with issues concerning termism. For instance, profit maximization, however, measured, is usually seen as a short-term objective whereas wealth maximization is a long-term objective. There can be a conflict between short-term and long-term performance. Thus, it is quite possible, for example, to maximize short-term profits at the expense of long-term profits.

1. Briefly, discuss three (3) ways managers of a business may increase short-term profits at the expense of long-term profits.  
2. Explain three (3) instances where conflicts might occur between management and shareholders.

Explain the term “Maximization of Shareholders’ Wealth”.         

Answer rating: 100% (QA)

W ays managers of a business may increase shortterm profits at the expense of longterm profits 1To get the cost advantages A cost at which a firm is a... View the full answer