The conflict between the goals of a firm's owners and the goals of its non-owner managers is
A) the agency problem.
B) incompatibility.
C) serious only when profits decline.
D) of little importance in most large U.S. firms.

Question

Quizplus · Accepted Answer

The conflict between the goals of a firm's owners and the goals of its non-owner managers is known as the agency problem. This arises because managers may prioritize their own interests over those of the owners who hired them, leading to a misalignment of incentives and potentially reducing firm value.

The Conflict Between the Goals of a Firm's Owners and the Goals