Which of the following is true?
A)People in firms have equal knowledge
B)Employee empowerment increases when firms centralize key functions
C)Decision rights and knowledge must be separated to minimize agency costs
D)Theft by employees is an example of an agency cost
E)None of the above

Question

Quizplus · Accepted Answer

Theft by employees is an example of an agency cost, where the employee acts in their own interest rather than the interest of the firm, resulting in a loss for the firm. A, B, and C are not true as knowledge and decision-making authority are not always equal among employees, employee empowerment may decrease with centralization, and separating decision rights and knowledge can increase agency costs.

Which of the Following Is True