Question

In many countries with concentrated ownership

A. the conflicts of interest between shareholders and managers are worse than in countries with diffuse ownership of firms.
B. the conflicts of interest are greater between large controlling shareholders and small outside shareholders than between managers and shareholders.
C. the conflicts of interest are greater between managers and shareholders than between large controlling shareholders and small outside shareholders.
D. corporate forms of business organization with concentrated ownership are rare.

Answer 1

The correct answer is B. the conflicts of interest are greater between large controlling shareholders and small outside shareholders than between managers and shareholders.

Step-by-step explanation:

Conflicts of interest are those situations in which the judgment of a subject, in relation to a primary interest for him or her, and the integrity of their actions, have to be unduly influenced by a secondary interest, which is often of economic or personal type. That is, a person incurs a conflict of interest when instead of complying with the right thing, he could guide his decisions or act for his own benefit or that of a third party.

Conflicts of interest are present in numerous decisions of the lives of professionals, managers and employees, as well as of companies and organizations, public or private. An example of a conflict of interest is, for example: Being a director of a company and, at the same time, being a partner of another provider company of which it is directed. At some point, under such circumstances, decisions will have to be made in relation to suppliers, and the following questions will surely arise: what will be privileged? The company you are running or the company you are a partner of?