Any situation where a potential conflict can arise between the firm\'s owners an

Question

Any situation where a potential conflict can arise between the firm's owners and its managers is referred to as a(n): a. organizational problem. b. personnel conflict. c. agency problem. d. control issue. e. compensation issue.
Any situation where a potential conflict can arise between the firm's owners and its managers is referred to as a(n): a. organizational problem. b. personnel conflict. c. agency problem. d. control issue. e. compensation issue.
Any situation where a potential conflict can arise between the firm's owners and its managers is referred to as a(n): a. organizational problem. b. personnel conflict. c. agency problem. d. control issue. e. compensation issue.

Explanation / Answer

Answer:

c:) Agency problem

Explanation to the answer:

Agency problem can be defined as the conflict for the interest inherent within the relationship where one side party is expected for acting in other party's best interests.

For the corporate we can define the agency problem will occure usually as conflict of interest between management and company's stockholders

So in the given situation where the potential conflict can arise between the firm's owners and its managers is referred to as an Agency problem

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