Agency Theory Recognizes Two Kinds of Information Consumers

question 8

Multiple Choice

Agency theory recognizes two kinds of information consumers. Which of the following describes the relationship between them?

• A) Principals hire agents to make decisions for them.
• B) Agents hire principals to hold them accountable for decisions.
• C) Principals and agents work together in the best interest of the organization.
• D) Principals are government employees, while agents work in the private sector.

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Definitions:

Competence

The legal ability, knowledge, and skill required to do something or to appear in court.

Loyalty

A strong feeling of support or allegiance to someone or something, often expecting a mutual sense of duty and faithfulness in return.

Wrongful Dismissal

Termination of an employee's contract of employment in violation of the law or the terms of the contract itself.

Employment Relationship

A legal and formal association between an employer and an employee where both parties have specific rights and obligations.