Response to the following questions:
1. List four kinds of compensation for a firm's management. Identify the arrangements that would be most effective in aligning the interests of shareholders and management.
2. Can shareholder wealth maximization be consistent with a firm's social responsibility? Explain. Consider International Business Machines (IBM), whose headquarters are located in Armonk, New York, but whose manufacturing and sales operations span the globe. Who are IBM's stakeholders? If IBM trims is work force, what obligations does it have to its stakeholders?