When managers pursue strategies that are not in the interests of stockholders, this is call __________________.

Question

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This situation is known as the agency problem, where managers prioritize their own interests over those of the stockholders they represent. This can lead to decisions such as empire building or unauthorized acquisitions, which may not align with the company's overall goals and objectives. It can ultimately result in a lack of strategic coherence and potentially lead to corporate scandals.

When Managers Pursue Strategies That Are Not in the Interests