Whenever there is a separation of the owners (principals)and the managers (agents)of a firm,the potential exists for the wishes of the ____ to be ignored.

Question

Quizplus · Accepted Answer

The separation of owners and managers creates a situation known as the principal-agent problem. The owners (principals) may have different goals and objectives than the managers (agents), which can lead to conflicts of interest. If the managers prioritize their own goals over those of the owners, the owners' wishes may be ignored. Therefore, the potential for the owners' wishes to be ignored exists.

Whenever There Is a Separation of the Owners (Principals)and the Managers