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Company Measuring Customer Satisfaction And The Role Of Compensation In Agency Theory


1. Connects Pty Ltd operates a freight transport business. An important goal of the company is to satisfy customers. In order to monitor customer satisfaction, the company measures the number of hours worked by each employee. This measure is:

I. Valid
II. Reliable
III. Clear
IV. Timely

A. I only
B. II and IV only
C. II, III and IV only
D. I, II, III and IV

2.  According to agency theory, which one of the following statements best describes the main role of compensation systems?

A. To provide information about a manager’s performance

B. To provide an incentive for managers to pursue organizational goals

C. To reduce risk-seeking behavior by managers

D. To provide information about a manager’s skills and knowledge.


These multiple choice questions belong to Corporate Strategy and the 1st question discusses about a company measuring customer satisfaction by measuring hours worked by each employee and the 2nd question is about the main role of compensation systems according to agency theory.

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