You are the owner of a Comfort Inn and would like to hire a new general manager. In terms of preventing possible agency problems, what should you include in your offer?
A)a very high fixed salary
B)a fancy office with a private secretary
C)a 37-hour workweek
D)profit sharing

Question

Quizplus · Accepted Answer

Profit sharing is a good option to prevent possible agency problems as it aligns the interests of the general manager with that of the owner, as they both benefit from the hotel's success. The other options like a high fixed salary, fancy office, and shorter workweek do not necessarily guarantee that the general manager will act in the best interest of the owner and may even create a sense of entitlement or complacency.

You Are the Owner of a Comfort Inn and Would