Which one of the following is most apt to create a situation where an agency conflict could arise?
A)Increasing the size of a firm's operations
B)Downsizing a firm
C)Separating management from ownership
D)Decreasing employee turnover
E)Reducing both management and nonmanagement salaries

Question

Quizplus · Accepted Answer

Separating management from ownership creates a situation where the interests of managers (who may prioritize their own career advancement and bonuses) and owners (who may prioritize maximizing profits) may not align, thus creating potential for agency conflicts.

Which One of the Following Is Most Apt to Create