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A Firm Owner Wants a Manager to Make Difficult Personnel

question 5

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A firm owner wants a manager to make difficult personnel decisions when necessary (which requires firing a worker every now and then) in order to maximize the firm's profits. The manager, however, prefers to not fire anyone. The worker also prefers not to be fired. In this example, who is the principal and who is the agent?

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Definitions:

Charismatics

Individuals possessing a compelling charm or appeal that inspires devotion or enthusiasm in others.

Leadership Qualifications

The skills, knowledge, and personal attributes considered necessary for effective leadership, such as strategic thinking, communication abilities, and integrity.

Charismatic Leadership

A style of leadership that draws on the leader's personal charm and appeal to inspire and energize followers toward achieving a vision or goals.

Excessive Confidence

An overstated belief in one's abilities, skills, or achievements, often without sufficient evidence or justification.

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