Question

One common explanation why privately-held companies are often cited as our best examples of socially responsible and ethical business practices is

a. CEOs in privately-held companies tend to be better educated.
b. compensation in privately-held companies is more likely to be based on specific, measurable social outcomes (e.g. reducing pollution, providing health-care benefits to workers).
c. privately-held companies are not as likely to face pressure for short-term financial performance.
d. privately-held companies are more likely to publicize their socially responsible initiatives in an effort to build customer awareness.

Answer 1

The correct option is option c. privately-held companies are not as likely to face pressure for short-term financial performance.

The correct explanation as to why privately-held companies are often cited as our best examples of socially responsible and ethical business practices is that privately-held companies are not as likely to face pressure for short-term financial performance.

Step-by-step explanation:

The correct explanation as to why privately-held companies are often cited as our best examples of socially responsible and ethical business practices is option c. privately-held companies are not as likely to face pressure for short-term financial performance. Unlike publicly-traded companies, privately-held companies are not bound by the expectations of quarterly earnings reports and shareholder demands. This allows them to focus on long-term goals and make decisions that prioritize social responsibility and ethics.

For example, a privately-held company may invest in environmentally-friendly practices or provide comprehensive healthcare benefits to its employees without being constrained by short-term financial performance obligations.

Furthermore, privately-held companies may also have a stronger sense of ownership and commitment to their stakeholders, including employees and the local community, which can drive their socially responsible and ethical practices.