One Way to Overcome the Principal-Agent Problem Is To

question 33

Multiple Choice

One way to overcome the principal-agent problem is to:

• A) Flatten the organization.
• B) Micromanage the management team.
• C) Make managers owners through stock options.
• D) Increase the scope of management's responsibilities.

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Definitions:

Operational Plan

A detailed plan outlining the tactics an organization will use to achieve the targets and objectives set in its strategic plan.

Standing Plans

Pre-established procedures and guidelines designed to be implemented repeatedly in situations that occur frequently within an organization.

Single-use Plans

Plans developed to achieve a set of goals that are unlikely to be repeated in the future. They are specific, unique, and not intended for recurring use.

Functional Plans

Functional plans are detailed strategies developed for specific areas within an organization, such as sales, marketing, or HR, outlining how goals will be achieved in those areas.