Question

An agency relationship can degenerate into an agency conflict when an agent acts in a manner that is not in the best interest of his or her principal. In business, these conflicts most frequently involve the enrichment of the firm's executives or managers (in the form of money and perquisites or power and prestige) at the expense of the shareholders. This usurping of shareholder wealth is most likely to occur when shareholders do not have sufficient information about the decisions and actions being made by the firm's management.

a) Consider the following scenario and determine whether an agency conflict exists:
Daniel owns Daniel's Tantalizing Tees, a T-shirt shop in a small college town in Kansas. With a staff of three part-time employees, Daniel operates the business in accordance with his personal goals, dreams, and capabilities.
1. Does Daniel have an agency conflict to deal with?
O No; by having part-time, as opposed to full-time, employees, Daniel is prevented from experiencing an agency conflict.
O Yes; as both the owner and operator of Daniel's Tantalizing Tees, Daniel has created the necessary agency relationship through which an agency conflict can exist.
O No; as both the owner and operator of Daniel's Tantalizing Tees, Daniel has not created the necessary agency relationship through which an agency conflict can exist.
O Yes; there is always an inherent conflict of interest between owners and operators (managers).

Answer 1

Answer: she

Explanation: 3745

Answer 2

O No; as both the owner and operator of Daniel's Tantalizing Tees, Daniel has not created the necessary agency relationship through which an agency conflict can exist.

Explanation: Agency Conflict is a conflict of interest that exists between the owners of a business and their managers of the business.

DANIEL IS BOTH THE OWNER OF THE BUSINESS AND THE MANAGER OF THE BUSINESS,DANIEL HAS NOT CREATED ANY OPPORTUNITIES FOR AGENCY CONFLICTS BECAUSE DANIEL MANAGES THE BUSINESS ACCORDING TO THE WISH OF HIMSELF WHO IS THE OWNER AND THE MANAGEMENT WHO IS ALSO HIMSELF.