The Principal-Agent Problem Is More Serious in Large Firms Than

question 170

Multiple Choice

The principal-agent problem is more serious in large firms than in small firms because

• A)monitoring employee activity in large firms is generally more difficult.
• B)employees in large firms have less information.
• C)profits increase with the size of the firm.
• D)customers expect better treatment from small firms and they usually get it.

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Definitions:

Object Relations Theory

A psychodynamic theory that focuses on the importance of internal relationships with others, formed during early development, in shaping the self and influencing social behavior.

Transference

In psychoanalysis, the process by which patients project onto their analysts feelings and attitudes they have developed toward important figures in their lives.

Countertransference

The process of a therapist developing emotional reactions to a patient, often influenced by the therapist's own personal background and psychological issues.

Corrective Emotional Experience

A therapeutic process where the client re-experiences emotional situations in a safe environment to overcome past traumas.