Unethical Status (Ageincy Problem) - Case Study Example

Only on StudentShare

Extract of sample
Unethical Status (Ageincy Problem)

Unethical Status (Ageincy Problem)

Agency relationship occurs when shareholders (principals) hire another person or persons (agents) to undertake certain duties on behalf of them (principals). Agency theory portrays the firm as a nexus of contracts between the holders of resources. This paper explores the type of conflict in the case, effect on stakeholders, type of costs involved and how to minimize the conflict.
Shareholder-Management Conflict: The case involves agency conflict between shareholders and the management. When managers hide some information from shareholders, an agency problem arises. A conflict ensues between shareholders and the managers of the organisation. Managers will most often try to pursue self-interest gains at the expense of shareholders in an imperfect market. According to agency theory, agency problem arises when managers put their self-interest goals before those of shareholders.The asymmetric flow of information in an imperfect market makes it possible for managers to pursue their self-interests rather than that of the organisation (Bhabatosh, 2008). For example, managers are usually in a better opposition to know the ability of the organisation to meet shareholders expectations than the shareholders. Because of uncertainties in the market, managers can always influence the outcome of the performance of the organisation. They can manipulate the results to be positive or negative in pursuit of self-interests. The conflict between shareholders arises when managers seek for deals that reduce the profit of the firm. For example, when managers seek for perquisites and pay rise, there may be a conflict between shareholders and the managers because this would most likely reduce the shareholder value. ...Show more

Summary

Agency problems arise because of conflicting interest of shareholders and the management or with lenders. Shareholder-management conflict occurs when managers use the resources of the company for their personal gains rather than pursue the interest of shareholders. …
Author : reynoldscade
Unethical Status (Ageincy Problem) essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the case study on your topic
"Unethical Status (Ageincy Problem)"
with a personal 20% discount.
Grab the best paper

Related Essays

Problem Identification
Therefore, when talking about this important sector, there are many problems associated with the sector, which cross one’s mind. These can include hygiene problems in hospitals, inadequate training of the nursing staff, shortage of emergency facilities in hospitals and so forth.
2 pages (500 words) Case Study
Ethical or Unethical Behaviour at Boeing

When analysing the company’s recent performances, it was observed that Boeing have faced much criticism on the grounds of its unethical and illegal behaviour towards its stakeholders. It has been observed that Boeing was unable to integrate the cultural diversity aspects with efficiency within its organisational working environment.

5 pages (1250 words) Case Study
The status of trustees
The word fiduciary comes from the Latin word 'fides' meaning faith. A beneficiary puts his entire trust on a fiduciary, who in turn has to keep his self interests at bay and must not profit from the benefits of the position he holds.
6 pages (1500 words) Case Study
Problem Identification
These can include hygiene problems in hospitals, inadequate training of the nursing staff, shortage of emergency facilities in hospitals and so forth. However, in my personal opinion, the most basic problem faced by the healthcare
2 pages (500 words) Case Study
Problem solving
As a company, safety should always be their priority. They should also be punished for letting an employee drink alcohol while on duty. They should also be responsible for the oil spill mess, meaning they have to clean
1 pages (250 words) Case Study
Problem identification
These include: the cost and quality of health care services provided; effective delivery of health care; feasibility and validity of health care policies etc. For the purpose of
2 pages (500 words) Case Study
Case problem
Peter Flagstaff and Lindsay Gibson need to approach the problem in information sharing strategically. This can take place through the discouragement of the negative notions that the company’s employees uphold. Effective information sharing within an organization plays a
1 pages (250 words) Case Study
CASE STUDY: NUTRITIONAL STATUS OF AN INDIVIDUAL
It is based on this understanding of the effect of nutrition on the life of a person that this study has been conducted on Patient Y (name withdrawn for ethical reasons) to critically describe and evaluate
8 pages (2000 words) Case Study
Analysis of Unethical issue in Apple's business
Chinese labor laws have accused Apple of violating its social responsibility code by contracting companies that employ underage people and forcing people to work for many hours without paying
6 pages (1500 words) Case Study
Mental Health Status Exam
They made enquiries and booked for an appointment via telephone. The interview sessions were conducted at the clinic. Physically, Dale is a relatively tall, immaculately dressed
2 pages (500 words) Case Study
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT