Which one of the following situations is most likely to create an agency conflict?
A)compensating a manager based on his or her division's net income
B)giving all employees a bonus if a certain level of efficiency is maintained
C)hiring an independent consultant to study the operating efficiency of the firm
D)rejecting a profitable project to protect employee jobs
E)selling under-performing assets owned by the firm

Question

Quizplus · Accepted Answer

Rejecting a profitable project to protect employee jobs can create an agency conflict because it prioritizes employee interests over shareholder interests, potentially leading to a conflict between management and shareholders.

Which One of the Following Situations Is Most Likely to Create