One of the benefits associated with employee buy-in is that: A. there are strong

Question

One of the benefits associated with employee buy-in is that: A. there are stronger incentives on the part of the employees to implement decisions recommended by themselves. B. greater use can be made of specific dispersed knowledge. C. employees do not have to take accountability for a decision. D. upper-level management can enforce their decisions unilaterally.

Precontractual informational asymmetries that generate contracting costs can lead to A. bargaining failures and adverse selection. B. implicit contracts and reputational concerns. C. explicit contracts and credibility issues. D. perquisite taking and differential risk exposure.

Explanation / Answer

Answer to qiestion 1 : There are stronger incentives on the part of the employees to implement decisions recommended by themselves.

Explanation: Because their (employee's) reputation depend on the ultimate outcome of the decision.

Answer to qiestion 2 :. Bargaining failures and adverse selection.

Explanation: Adverse selection denotes the tendency of individuals, with private information about something that affects the trading partner's costs or benefits, to make offers that are detrimental to the trading partner. Costs of adverse selection reduce the gains from trade and can cause market failures.

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