Which of the following is likely to result in agency issues?
A)Managers have a high probability of being fired if they undertake a project that loses money.
B)Employees are fearful of losing their jobs.
C)Management must compete for scarce resources.
D)All of the above are likely to result in agency issues.

Question

Quizplus · Accepted Answer

All of the choices listed can result in agency issues. In choice A, managers may prioritize short-term gains over long-term benefits in order to avoid the risk of being fired. In choice B, employees may engage in unethical behavior or shirk their duties to avoid being fired. In choice C, management may prioritize competition over cooperation and make decisions that prioritize their own interests rather than those of the company or its stakeholders. These factors can all create conflicts of interest between different parties within a company and ultimately lead to agency issues. All of the given options have the potential to result in agency issues. Option A can create incentive for managers to undertake projects that are safe and result in short-term gains, rather than taking risks and investing in long-term projects. Option B can lead to employees prioritizing job security over productivity, potentially resulting in missed deadlines and lower quality work. Option C creates competition within the organization for resources, which can lead to managers prioritizing their own departments or projects over others, resulting in suboptimal allocation of resources.

Which of the Following Is Likely to Result in Agency