The Principal-Agent Problem Arises Because of

question 5

Multiple Choice

The principal-agent problem arises because of

• A)natural selection
• B)diminishing marginal returns
• C)hidden actions
• D)the winner's curse
• E)hidden characteristics

---

Definitions:

Motivating Potential

The capacity of a task, role, or job to inspire sustained interest and effort from those engaged in it.

Job Enrichment Programs

Initiatives designed to enhance job satisfaction and performance by adding more meaningful tasks and giving employees more control over their work.

Extrinsic Rewards

Benefits provided by the employer or an outside source, which serve as motivation for employees beyond internal satisfaction.

Task Significance

The degree to which a job has a substantial impact on the lives or work of other people either within or outside the organization.