Because agents may not set the same goals and objectives as principals, organizations may experience which of the following general agency costs? I. Goal alignment costs
II. Losses from a downturn in economic conditions
III. Monitoring costs
A) I and III only
B) II and III only
C) III only
D) I, II, and III

Question

Quizplus · Accepted Answer

Goal alignment costs and monitoring costs are general agency costs that arise due to the potential misalignment of goals between agents and principals. Losses from a downturn in economic conditions are not related to agency costs.

Because Agents May Not Set the Same Goals and Objectives