A Drawback of Separating Ownership from Control by Creating a Firm

question 136

Multiple Choice

A drawback of separating ownership from control by creating a firm is:

• A)The losses of specialization.
• B)Increased transaction costs.
• C)The principal-agent problem.
• D)Synergies of team production.

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Definitions:

False Positive Reaction

Occurs when a test or analysis incorrectly identifies the presence of a condition or attribute that is actually not present.

Dangerous

Involving potential harm or risk to safety, health, or well-being.

Pitfalls

Hidden dangers, problems, or unforeseen challenges that can complicate actions or decisions.

Glass Cliff

The phenomenon where women or minority leaders are more likely to be placed in leadership roles during times of crisis or organizational decline, posing a higher risk of failure.