The conflict between the goals of a firm's owners and the goals of its nonowner managers is
A) the agency problem.
B) of little importance in most large U.S. firms.
C) serious only when profits decline.
D) incompatibility.

Question

Quizplus · Accepted Answer

The conflict between the goals of a firm's owners and the goals of its nonowner managers is commonly known as the agency problem. Nonowner managers may prioritize their own interests, such as job security or personal gain, over the interests of the owners who seek to maximize profits. This conflict can result in a misalignment of incentives, which can negatively impact the performance of the firm.

The Conflict Between the Goals of a Firm's Owners and the Goals