Define “significant influence.” Is it more beneficial to have “significance influence” over an organization or is it better to exercise control through voting rights? Please discuss your rationale

"The solution has been provided in a generalized manner". Significant influence plays a crucial…

Answered: Define “significant influence.” Is it…

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Question

Define “significant influence.” Is it more beneficial to have “significance influence” over an organization or is it better to exercise control through voting rights? Please discuss your rationale

Expert Solution

Introduction:

"The solution has been provided in a generalized manner".

Significant influence plays a crucial role in the world of business and finance.
It allows investors and board members to shape the direction of an organization and influence its strategic and operating decisions without having to take on the full burden of control.
This approach can provide numerous benefits to investors, including the ability to guide an organization towards their desired outcomes while minimizing risk and liability.
Additionally, significant influence can benefit organizations by providing them with access to valuable resources, expertise, and guidance from experienced investors and board members.