Question

Myopic behavior occurs when a manager takes actions that improve budgetary performance in the short run but bring long-run harm to the firm. Which of the following items is NOT a possible example of myopic behavior? Multiple Choice
Promotion of deserving employees
Reducing expenditures on preventive maintenance.
Cutting back on new product development
Buying cheaper lower quality materials so that the company does not exceed the materials purchases budget.

Answer 1

Answer:

The correct answer is letter "A": Promotion of deserving employees.

Explanation:

Myopic behavior is the result of top executives being under the pressure of meeting performance objectives in the short-run. Managers tend to cut expenses in an attempt of increasing earnings but this usually by shortening operations of the business.

Avoiding to promote employees who deserve it is an example of myopic behavior practices. Increasing workers' salaries is not convenient for entities that want to achieve their performance goals.