A conflict of interest between the stockholders and management of a firm is called: a. stockholders' liability. b. corporate breakdown. c. the agency problem. d. corporate activism. e. legal liability.

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Business

Armando Larsen

17 October, 11:02

A conflict of interest between the stockholders and management of a firm is called: a. stockholders' liability. b. corporate breakdown. c. the agency problem. d. corporate activism. e. legal liability.

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Taryn Dalton · Answer 1

the agency problem

Explanation:

The issue with the organisation is a conflict of interest present in either partnership where each party is required to look after the interests of someone else. In management consulting, the issue with the corporation generally refers to a conflicts of interest among management of a business and shareholders of the organization.

The management, acting on behalf for stakeholders or executives, will take decisions that increase shareholder value wealth, although it is in the long term interests of the supervisor to maximize his personal riches.