The principal-agent problem is quite common in large public corporations due to:

Question

Quizplus · Accepted Answer

The principal-agent problem occurs when the agent, who makes the operational decisions, may prioritize their own interests over those of the principal, who is the owner. In large public corporations, the people making the operational decisions are usually not the owners, making the principal-agent problem quite common in such companies. The problem is not related to sales volume or number of employees, and regulation may or may not be a factor depending on the specific industry and country.

The Principal-Agent Problem Is Quite Common in Large Public Corporations