In Corporations, a Principal-Agent Problem Can Arise When

question 376

Multiple Choice

In corporations, a principal-agent problem can arise when

• A)the shareholders are the principal and the managers are the agent.
• B)the board of directors is the principal and the managers are the agent.
• C)the shareholders are the principal and the board of directors is the agent.
• D)All of the above are correct.

---

Definitions:

Job Rotation

A human resources strategy where employees rotate between multiple positions within an organization to gain diverse skills and experiences.

Alternative Work Arrangements

Employment setups that differ from traditional full-time, in-office jobs, such as telecommuting, flexible schedules, and part-time positions.

Motivating Potential

The inherent or designed capacity of a task, role, or environment to stimulate and sustain individuals' interest and effort.

Core Job Characteristics

Key elements of a job that affect an individual's motivation and job satisfaction, including skill variety, task identity, task significance, autonomy, and feedback.