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Agency Theory: Relationships of Principals & Agents

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Agency theory captures all of the dynamics of _____.

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1. Which of the following is an example of self-interested behavior on the part of an agent?

2. Thomas is the CEO of a major manufacturing company, while Lois is one of the shareholders. In this relationship, which person is the principal?

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About This Quiz & Worksheet

This quiz/worksheet includes questions that hit on key facets of the agency theory, asking you to define this term and identify related terms and examples of its application.

Quiz & Worksheet Goals

This quiz/worksheet can be used to test yourself on:

  • Agency
  • Business principals
  • Agents
  • Conflicts within the agency theory

Skills Practiced

  • Defining key concepts - ensure that you can accurately describe agency and agency theory
  • Making connections - use understanding of the concepts of principals and agents in business to correctly identify examples of them
  • Information recall - access the knowledge you've gained regarding discord that can take place in agency theory

Additional Learning

To learn more about this business concept, check out the accompanying lesson titled Agency Theory: Relationships of Principals & Agents. This lesson consists of the following objectives:

  • Understand the potential problem of self-interested behavior
  • Know why a difference in attitude can pose issues within an agency relationship
  • Familiarize yourself with the history behind agency theory
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