Which of the Following Management Actions Reflects Agency Problems Due

question 2

Multiple Choice

Which of the following management actions reflects agency problems due to the fact that information held by the agent is hard to observe?

• A)Enriching managers themselves even if shareholders do not benefit
• B)Avoiding risky strategic initiatives even if shareholders view them as "reasonable"
• C)Paying for services that seem excessive to the shareholders
• D)Pumping up the firm's short-run performance even if shareholders are harmed in the long-run
• E)Giving work a mediocre effort so managers do not have to work excessive hours

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Definitions:

IS Professionals

Information Systems Professionals, individuals who specialize in the development, implementation, and maintenance of computer systems designed to organize, store, and communicate information.

Information Systems

Systems that collect, process, store, analyze, and disseminate information for a specific purpose.

Pilot Conversion

Implementation process that introduces the new system in one part of the organization on a trial basis. When the new system is working properly, it is introduced in other parts of the organization.

Scope Creep

Adding functions to an information system after the project has begun.