An Agency Problem Can Occur When

question 47

Multiple Choice

An agency problem can occur when

• A) the desires and objectives of the owners and agents conflict.
• B) there is too much oversight.
• C) the owners and agents share the same attitudes toward risk.
• D) executives select risky strategies because they fear losing their jobs if the strategy fails.
• E) there is a dual role for the CEO and chair of the board.

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Definitions:

Multiple Linkage Model

A leadership model that proposes leaders influence group performance through specific variables, including task structure and group atmosphere.

Managerial Behavior

The patterns of actions and behaviors exhibited by managers in directing and motivating employees, and in implementing strategies to achieve organizational goals.

Situational Variables

Factors that are present in a particular environment or context, which can affect the outcome of a situation or the behavior of individuals.

Exposure

The state of being subject to the possibility of being attacked or harmed, either physically or emotionally, or in the context of marketing, the degree to which a target audience sees a promotional message.