The principal-agent problem that exists between shareholders and managers also exists between managers and workers.

Question

Quizplus · Accepted Answer

The principal-agent problem arises when there is a conflict of interest between the principal (shareholders) and the agent (managers or workers). In the case of managers and workers, the problem arises because the principal (managers) may prioritize their own interests over those of the agent (workers), causing a conflict of interest. Thus, the principal-agent problem exists between managers and workers as well.

The Principal-Agent Problem That Exists Between Shareholders and Managers Also