Asked by Baylee Johnson on Jul 21, 2024
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An agency problem occurs when there is a conflict of interest between the managers and the shareholders.
Agency Problem
arises in situations where there is a conflict of interest between the principals (owners) and agents (managers) of an organization, leading to potential difficulties in aligning their goals.
Conflict of Interest
A situation where a person's personal interest could potentially interfere with their professional duties or responsibilities, leading to compromised decision-making.
- Grasp the concept of agency problems and their impact on organizational performance.
Verified Answer
Learning Objectives
- Grasp the concept of agency problems and their impact on organizational performance.
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