Both Adams and Wolfe are large public corporations with subsidiaries throughout the world. Adams uses a centralized approach and makes most of the decisions for its subsidiaries. Wolfe uses a decentralized approach and its subsidiaries make most of their own decisions. Which of the following is correct?
A. the agency problem would probably be more pronounced for Wolfe because of a higher probability that subsidiary decisions would conflict with the parent
B. agency costs would be the same for both companies
C. a decentralized approach is almost always better
D. a centralized approach is almost always better
E. none of the above