After an LBO, managers are likely to shirk Blank______.Multiple choice question.all dutieslesshardermore

Break Down the Problem

1. Identify the context: The question pertains to managerial behavior after a Leveraged Buyout (LBO).
2. Analyze the options available: "all duties," "less," "harder," "more."

Relevant Concepts

1. Understanding the implications of an LBO on managerial incentives.
2. The concept of agency theory, which examines the conflicts of interest between stakeholders.

Analysis and Detail

1. In an LBO, managers may feel less pressure as they have significant debt backing the buyout. This context can lead to reduced effort or commitment since their own financial stakes might not be directly tied to the performance post-LBO.
2. The option "all duties" suggests complete neglect which is unrealistic; "harder" implies increased effort which contradicts typical behavioral responses in such financial contexts.
3. "More" typically indicates increased responsibilities or expectations, which may not align with the nature of LBOs.
4. "Less" is a plausible option, indicating managers might do fewer tasks or shirk responsibilities due to the cushioned environment following an LBO.

Verify and Summarize

• The best choice, considering incentives and behavioral economics post-LBO, is likely to be "less."

Final Answer

Managers are likely to shirk less after an LBO.