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Asked by Jaiden Hamilton on Jun 11, 2024

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Which harvest option can force a leadership team to focus on short-term profits and performance results?

A) Management buyout (MBO)
B) Employee Stock Ownership Plan (ESOP)
C) Initial Public Offering (IPO)
D) Strategic Alliance

Short-Term Profits

Gains realized from business operations or investments over a short period, typically within a year, focusing on immediate financial returns.

Leadership Team

A group of individuals at the helm of an organization who are responsible for setting strategies, making decisions, and guiding the entity towards its goals.

Employee Stock Ownership Plan

A company-run program in which employees are given shares in the company as a part of their compensation, aiming to align employees' interests with the performance of the company.

  • Discern the merits and demerits of transitioning into a public company.
  • Assess the challenges related to financing and capital in management buyouts and public offerings.
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AP
Amanda PettiferJun 15, 2024
Final Answer :
C
Explanation :
An Initial Public Offering (IPO) is a harvest option where a private company goes public by selling shares to the general public. This requires the company to meet certain financial and reporting requirements, which can put pressure on the leadership team to focus on short-term profits and performance results in order to attract investors and get a high valuation for their shares. This can lead to a shift away from long-term strategic planning and decision-making.

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