
Case Summary:
The President; Federico Garcia is having a meeting with the sales representative entitled to a bonus. Has to explain to them that the company is in no financial position to pay them, and is legally not entitled to pay either.
Characters in the case:
Federico Garcia, Michael, CFO James Wilson
Adequate Information:
Puget Building Materials will have to make the difficult decision of either paying the representatives and facing the future financial repercussions or not giving them the bonus and betraying the representatives.
To determine:
We are to instruct Federico to inform the sales reps that their bonuses would be delayed until the company's financial future is clarified.

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Chapter 12 Solutions
EBK UNDERSTANDING MANAGEMENT
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- 5. A risk that has both a high impact and high probability is referred to as A. Negligible B. Moderate C. Low D. Extreme 6. A business continuity plan is mainly used to_ A. Increase profits B. Handle daily tasks C. Prepare for disruptions D. Advertise services 7. What is the role of a risk owner? A. To finance the risk B. To monitor and manage a specific risk C. To create risks D. To avoid planning 8. Early warning indicators help businesses to A. Avoid legal actions B. Grow rapidly C. Detect potential risks D. Hire employees 9. A hazard-based risk includes A. Political instability B. Ergonomic issues C. Market demand D. Taxation changesarrow_forward1. What is the primary purpose of risk management in small businesses? A. To eliminate all risks B. To predict profits C. To reduce and control risks D. To create new risks 2. Which of the following is a type of operational risk? A. Interest rate change B. Natural disaster C. Supplier failure D. Tax policy change 3. SWOT analysis identifies all EXCEPT A. Strengths B. Weaknesses C. Tactics D. Opportunities 4. Which strategy involves taking no action against a risk? A. Mitigation B. Avoidance C. Acceptance D. Transferarrow_forwardList and briefly describe four risk response strategies.arrow_forward
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