Question

There are many Kroger supermarkets. Because of the principle of _____, no individual store should be held financially responsible for the upkeep of supermarkets HQ in Cincinnati OH or for the salary of CEO.

Answer 1

The principle that prevents individual Kroger stores from being responsible for corporate expenses is the principle of corporate division of responsibilities. Small 'Mom and Pop' firms can survive without earning economic profits due to non-monetary benefits and a dedicated customer base.

Step-by-step explanation:

The principle that suggests that no individual Kroger supermarket store should be held financially responsible for the upkeep of the supermarket's HQ in Cincinnati, OH, or for the salary of the CEO is the principle of corporate division of responsibilities. This principle allocates financial responsibilities among different parts of a corporation to ensure efficiency in operations. Each store operates as a part of the larger Kroger brand but is financially autonomous when it comes to corporate-level expenses.

Regarding small "Mom and Pop firms," these entities may continue to exist without earning economic profits for various reasons. They often provide non-monetary benefits to their owners, such as a sense of community, satisfaction from being one's own boss, or fulfilling a niche that may not be profitable enough for larger chains. Furthermore, these small stores may have a loyal customer base that values personalized service over the cost advantages of larger stores.

Answer 2

The principle of limited liability ensures individual Kroger stores are not responsible for corporate costs. Small 'Mom and Pop' stores may not earn large profits but continue to operate for non-economic reasons such as community service, tradition, and customer loyalty.

Step-by-step explanation:

The principle you're referring to is likely limited liability, which ensures that each individual store in a large grocery chain like Kroger is not held financially responsible for the upkeep of the chain's headquarters or for the salary of the CEO. This principle is integral to the corporate structure, where a corporation is seen as a separate legal entity from its owners and individual locations, protecting individual assets of store owners or franchisees.

Regarding small "Mom and Pop" grocery stores, they sometimes exist without earning economic profits due to reasons other than financial gain. These could include community service, personal satisfaction, and the desire to maintain family tradition. Other non-economic advantages like flexibility, local customer loyalty, and personal relationships within the community also contribute to their continued operation.