The Root Cause of the Principal-Agent Problem Between Senior Executives

question 7

Multiple Choice

The root cause of the principal-agent problem between senior executives and lower-level employees can be explained by the

• A) informational advantage of the lower-level employees.
• B) higher number of lower-level employees than senior executives.
• C) knowledge of employees regarding day-to-day tasks.
• D) operational expertise of lower-level employees in concentrated areas of a particular field.

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Definitions:

Transferring Information

The process of conveying data, knowledge, or details from one source to another, ensuring communication or understanding.

Senders And Receivers

The parties involved in the transmission and reception of a message in the communication process.

Communication Efforts

The deliberate actions taken to convey information, ideas, or feelings to others.

Practical

Relating to actual experience or use; concerned with the application or use of something rather than theory.