The existence of divergent objectives between owners and managers is one example of a class of problems arising from ____.
A) social responsibility concerns
B) age differences between managers and owners
C) agency relationships
D) union-management relations

Question

Quizplus · Accepted Answer

The existence of divergent objectives between owners and managers is a classic example of an agency problem, where managers (agents) may not always act in the best interests of the owners (principals) they represent. This relationship can create conflicts of interest and make it difficult for managers to make decisions that align with the long-term goals of the organization. Social responsibility concerns, age differences, and union-management relations may also create challenges for organizational leaders, but they are not directly related to the agency problem.

The Existence of Divergent Objectives Between Owners and Managers Is