The Most Efficient Way to Overcome the Principal-Agent Problem in a Firm

question 78

Multiple Choice

The most efficient way to overcome the principal-agent problem in a firm is to

• A) increase the level of vertical integration within the firm.
• B) provide stock options to managers.
• C) downsize the existing workforce.
• D) organize economic activities within the firm.

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Definitions:

Team

A collection of people who regularly interact to pursue common goals.

Team Members

Individuals who work together in a coordinated effort to achieve specific group objectives.

Norms

Established standards or patterns of behavior that are accepted within a group or society.

Behaviour

Refers to the actions or reactions of an object or organism, usually in relation to the environment or surrounding.