The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?
A)organisational
B)structural
C)formation
D)agency
E)territorial

Question

Quizplus · Accepted Answer

The conflict between a firm's owners (principals) and its managers (agents) is commonly known as agency conflict. This arises as a result of differing interests between the two parties. The owners are concerned about maximizing their profits, while the managers may have their own goals and objectives that may conflict with those of the owners. This conflict can sometimes result in the managers making decisions that are not in the best interest of the firm or its owners.

The Potential Conflict of Interest Between a Firm's Owners and Its