According to agency theory, which of the following is NOT a fundamental difference between owners and managers?
A) Managers often have more information about the day-to-day business than do the owners.
B) Owners are more inclined to accept risk, whereas managers tend to minimize risk-oriented behavior.
C) Managers are more likely than owners to focus on a short time horizon.
D) Managers are individualswho own most modernorganizations, whereas ownersactually run them on aday-to-day basis.
E) Managers serve as agents who represent owners' interests.

Question

Quizplus · Accepted Answer

This statement is not a fundamental difference between owners and managers according to agency theory. In fact, it is often the opposite - owners are typically the ones who run the organization on a day-to-day basis, while managers serve as their agents. Options A, B, C, and E are all fundamental differences between owners and managers in the context of agency theory.

According to Agency Theory, Which of the Following Is NOT