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T/F/U. One way to improve workplace productivity is to give the CEO of a company stock...

T/F/U. One way to improve workplace productivity is to give the CEO of a company stock options. In your answer explain clearly what stock options are, what they do, and why they help or hurt productivity of a firm.

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Answer #1

Correct Answer:

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Company stock options are the incentives where the share of the company is issued to the CEO and ownership of the company is brought within the CEO. Now, profit of the company will increase the profit of the CEO. It will make CEO to take decisions that can increase the productivity, efficiency and employees achieve the organizational goals. As a result, company can achieve the targeted revenue and profit. It increases the share price and CEO being the owner of the company's share, also achieve the capital gain due to rise in price of the shares.

Hence, employee productivity will increase when agency conflict is eliminated and CEO will only take decisions that will help the company in best ways.


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