Question

When managers have little or no ownership in the​ firm, they are less likely to work energetically for the​ company's shareholders. We call this type of conflict​ a(n) __________. ​ (Select the best choice ​ below.)

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Part 1
A.management problem
B.moral problem
C.ownership problem
D.agency problem

Answer 1

Managers having little or no ownership in a firm and being less likely to work energetically for the company's shareholders is known as an agency problem.

Step-by-step explanation:

When managers have little or no ownership in the​ firm, they are less likely to work energetically for the​ company's shareholders. We call this type of conflict​ an agency problem. An agency problem refers to the conflict of interest that may arise between the owners (shareholders) and the managers of a firm. In this case, the managers may prioritize their own interests over those of the shareholders as they do not have a direct stake in the company's success.

Learn more about agency problem here: