Which of the following is a cause of 'agency problem'?
A) Conflict of interest between buyer and seller due to conflicting goals.
B) Sub-contractors fail to meet project milestones.
C) Detailed project engineering and planning problems.
D) Sub-contractors failure to perform due to poor quality performance.

Question

Which of the following is a cause of 'agency problem'? 
A) Conflict of interest between buyer and seller due to conflicting goals. 
B) Sub-contractors fail to meet project milestones. 
C) Detailed project engineering and planning problems. 
D) Sub-contractors failure to perform due to poor quality performance.

Quizplus · Accepted Answer

The agency problem arises due to a conflict of interest between the principals (owners) and agents (managers or executives), where each party may have different goals. This is most closely aligned with option A, where the conflict of interest between buyer and seller due to conflicting goals can be seen as a form of agency problem.

Which of the Following Is a Cause of 'Agency Problem