Matthew is a divisional manager at Venus Inc. and reports to the CEO of the company. The CEO delegates resources and authority to Matthew so that he can ensure good performance from the division. Matthew has more employees working for him than required and he has not told the CEO about this, even though there are other departments that need more employees. Which of the following concepts is illustrated here?

Question

Quizplus · Accepted Answer

This scenario demonstrates information asymmetry. Matthew has information (the fact that he has more employees than required) that the CEO does not have, and he is not disclosing it to the CEO. This means that there is a disconnect between the information available to both parties, and it can impact decision-making and performance within the division.

Matthew Is a Divisional Manager at Venus Inc