Agency Theory Is Concerned with Resolving Two Problems That Can

question 67

Multiple Choice

Agency theory is concerned with resolving two problems that can occur in agency relationships.Which of the following is not one of those problems?

• A) Goals conflict between principals and agents.
• B) Verification of actual agency activity is expensive and difficult to obtain.
• C) Principals and agents have differing attitudes toward risk.
• D) Stockholders and management align with external stakeholders.

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Definitions:

Creativity Undermine

Occurs when conditions or attitudes negatively impact the ability or willingness of individuals or teams to generate innovative ideas or solutions.

Social Approval

concerns the positive acceptance or endorsement by others within a social group or society, often influencing individuals' behavior and decisions.

Incubation

Describes a period of nurturing, support, and development for new ideas, startups, or innovations to help them mature or succeed.

Punish Failure

Punish failure refers to the practice of imposing negative consequences on employees or teams for not achieving predefined objectives or standards.