Any situation where a conflict may arise between the firm's owners and its
Managers is referred to as a(n):
A)organisational problem
B)personnel conflict
C)agency problem
D)control issue
E)compensation issue

Question

Quizplus · Accepted Answer

An agency problem occurs when there is a conflict of interest between the owners (shareholders) and managers (agents) of a firm. The managers may not act in the best interest of the owners and may prioritize their own interests instead, which can lead to a conflict. Therefore, option C is the most appropriate answer.

Any Situation Where a Conflict May Arise Between the Firm's