Agency Theory Deals with the Issue of

question 64

Multiple Choice

Agency theory deals with the issue of

• A) when to hire an agent to represent the firm in negotiations.
• B) the legal liabilities of a firm if an employee, acting as the firm's agent, injures someone.
• C) the limitations placed on an employee acting as the firm's agent to obligate or bind the firm.
• D) the conflicts that can arise between the viewpoints and motivations of a firm's owners and managers.

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Definitions:

Social Responsibility

refers to the obligation of individuals, organizations, and governments to act in a way that benefits society at large, beyond their own interests.

Dominant Social Paradigm

The prevailing set of values, beliefs, and practices in a society that influence and regulate people's behavior and interactions.

Rapid Industrialization

The accelerated development and growth of industry in a region or country, typically marked by significant technological, economic, and social changes.

Pollution

The contamination of the natural environment by harmful substances or energies, causing adverse effects on living organisms and ecosystems.