Question

Michael owns Michael’s Tantalizing Tees, a T-shirt shop in a small college town in New Hampshire. With a staff of three part-time employees, Michael operates the business in accordance with his personal goals, dreams, and capabilities. Does Michael have an agency conflict to deal with?

Answer 1

No

Step-by-step explanation:

Agency conflict occur when the owners of a firm do not manage the company. Instead the firm is managed by mangers. As a result, the interest of the manger might not be aligned with that of the owners and as a result the manager would not act in the best interest of the owners.

Agency problem is more common in public companies

Since Michael owns and operates the shop, there is no agency company as he seems to be a sole proprietor