In Order to Avoid Principal-Agent Problems, McDonald's Uses All but One

question 26

Multiple Choice

In order to avoid principal-agent problems, McDonald's uses all but one of the following franchising tactics. Which is the exception?

• A) It does not advertise for franchisees.
• B) Franchisees must put up 40 percent of the investment themselves.
• C) Franchisees must undergo a preliminary training period, followed by a 12- to 18-month training program.
• D) Franchisees must already have another fast-food restaurant franchise.
• E) Franchisees are required to work full-time daily in their restaurant.

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Definitions:

Interpersonal Relations

The social connections and interactions that occur between individuals in a professional or personal context.

Group Dynamics

The study of the behaviors and psychological processes occurring within a social group.

Team Structures

Organizational designs that emphasize collaboration and teamwork to achieve common objectives.

Permanent and Temporary Teams

A distinction between teams formed for ongoing, long-term purposes (permanent) and those created for a specific, short-term project or task (temporary).