Which of the following may make weak incentives mutually profitable for both owner and sales staff of an auto dealer?
A) If the sales staff is better able than the owner to bear the risk of a recession.
B) If the owner is better able than the sales staff to bear the risk of a recession.
C) If the owner and sales staff can equally bear the risk of a recession.
D) If neither the owner nor the sales staff has to bear the risk of a recession.

Question

Quizplus · Accepted Answer

If the owner is better able to bear the risk of a recession, they can offer weaker incentives to the sales staff, who might prefer a stable income over high-risk, high-reward incentives. This arrangement can be mutually beneficial as it aligns with the risk-bearing capacities of both parties.

Which of the Following May Make Weak Incentives Mutually Profitable