Corporate Governance Business Ethics Business Models

A CEO cuts next‑gen R&D in Q4 to hit earnings and trigger a personal bonus, harming long‑term viability. This is best read as:

• AAn agency cost driven by misaligned incentives, where short‑term payoffs induce decisions that reduce long‑term value, as stated here.
• BA long‑tail strategy, where small sales across many niche products replace blockbuster returns in innovation spending, as stated here.
• CAn adverse selection problem, where investors cannot observe capability and therefore hire an unqualified CEO initially, as stated here.
• DA thin market problem, where too few buyers exist for R&D outputs to justify continued investment and talent hiring.