A conflict between an owner and a manager may occur when
A)the manager earns more when the firm has higher profits.
B)the manager is seeking to maximize leisure time.
C)the owner can easily observe the manager slacking off and punish him accordingly.
D)the firm is very small and the manager must perform multiple tasks.

Question

Quizplus · Accepted Answer

Conflicts between an owner and a manager often arise when their interests are not aligned. In this case, if a manager is seeking to maximize leisure time, it may conflict with the owner's goal of maximizing the firm's productivity and profitability. The other options suggest scenarios where the manager's incentives are more aligned with the owner's interests or where monitoring is effective.

A Conflict Between an Owner and a Manager May Occur