How Might an Employer Reduce the Agency Costs Associated with an Employment

question 2

Multiple Choice

How might an employer reduce the agency costs associated with an employment contract?

• A) Reduce the effort and cost spent in monitoring the employee's work.
• B) Reduce the employee's probation period.
• C) Link the employee's pay to the level of output.
• D) Increase the number of levels in the management hierarchy.

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Definitions:

3PL Study

An examination or research focused on third-party logistics providers, covering aspects like efficiency, services, and impact on supply chains.

Third-party Suppliers

External entities that provide goods or services to a company, which are not part of the company's internal operations or supply chain.

Vertical Integration

A strategy where a company expands its business operations into different steps on the same production path, such as when a manufacturer owns its supplier and/or distributor.

Supply Chain

The network of all entities involved in producing and delivering a product or service, from the raw material to the end user.