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Organizational Socialization Process/Agency Problem

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Why should a company be concerned about the organizational socialization process?

Explain the agency problem. How can stock option programs work to lessen the agency problem?

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Solution Summary

The solution explains why a firm should be concerned about the organizational socialization process and explains the agency problem.

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Organizational socialization is the process whereby employees learn the expected behaviors and skills necessary to be successful in a particular job. The existing employees and management teach and/or mentor the new employee on the basics of what is expected of him or her.

When an employee starts a new job, the person usually feels isolated and is relatively uncertain of what the future may hold. The existing employees must be sure that the employee is welcomed and becomes a part of the organizational culture. In addition, the existing employees must help to ensure that the new employee has all the ...

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