Which of the following theories addresses the problems that arise when the interests of management are not in line with the stockholders of an organization?
A) Goal theory
B) Needs theory
C) Equity theory
D) Agency theory
E) Expectancy theory

Question

Quizplus · Accepted Answer

Agency theory deals with the problems that arise when the interests of management (agents) are not aligned with the interests of shareholders (principals). This theory aims to resolve the problems associated with the separation of ownership and control in an organization.

Which of the Following Theories Addresses the Problems That Arise