Why do you think alex took active role in supporting drug/ Managerial Economics
Alex Cohen is the general manager of the textile division in a large diversified company. Recently, Alex argued strongly to the CEO that an expansion request by the drug division be approved. On the surface, Alex’s actions seem strange, given that Alex is not affected by this decision (it does not affect his budget or his compensation). Further, Alex spent substantial time developing his presentation for the CEO.
a. Why do you think Alex took such an active role in supporting the drug division’s request?
b. Since Alex is not affected by the decision, should the CEO consider Alex as an unbiased observer who is focused on trying to maximize company value? Explain.
