Ray, a manager in Fir Tree Inc., a large and established firm, must travel to attend an annual conference.He books the most convenient flight tickets and a room in a luxurious hotel right next to the venue of the conference.Ray justifies these decisions by stating that these are time-saving measures.Ray's decisions can be best explained ________.

Question

Quizplus · Accepted Answer

Ray's decisions can be best explained by the agency theory, which suggests that there may be a conflict of interest between the agent (Ray, in this case) and the principal (Fir Tree Inc.). Ray, acting in his own interest, chooses the most convenient and luxurious options under the guise of time-saving, which may not align with the company's goal of cost efficiency.

Ray, a Manager in Fir Tree Inc