We know that it is possible to hire someone who is a "bad apple," but there are cases where the "bad apple" can actually be created by the company culture. True or False
2.Some people can claim ______, which is when they say that they were "just following orders."
conflicts of interest
paycheck blindness
conformity bias
obedience to authority
3.Which statement about agency theory is true?
all of the above
the role of the agent is to act in the best interest of the principal
none of the above
A principal is hired by an agent to do the work that the agent would not otherwise do
The principal’s self-interest can conflict with the ethical duty of the agent
4.
Marjoram hires Ross to sell cars, and then she tells him that continued employment is contingent on consistently meeting and exceeding his monthly quotas. She then says, "I don’t care how you do it. Just sell the cars." Why is this a moral hazard?
because he is the principal and it is his job to look out for the agent
because there is no apparent consequence if he lies to sell cars
this is not a moral hazard
because there is a lack of diversity and transparency
5.
It can be argued that a CEO whose compensation is equal to 475 average employees is damaging to shareholders because money that could be re-invested in the company is being spent elsewhere.
True
False