CHECK THESE SAMPLES OF Principal agent theory
To align the principal agent theory in practice, Sarbanes Oxley came into operation in 2002.... This is itself a contradiction to the principal agent theory.... The act tried to align the best interest of the shareholders and the agent i.... The first one of them is the shareholders (Principals) who elect the Management (agent) to represent them as the owner of the company.... The objective of the principal is to maximise shareholders wealth while that of Management can be the same or it can be different also....
9 Pages
(2250 words)
Essay
nbsp;… The purpose of this essay is not to argue that it is futile to discuss which is better, organizational culture or principal-agent theory.... As the paper outlines the principal-agent (PA) theory describes linkages entrenched in intricate delegation chains that influence the capacity of the international organisation leader to strive toward their own goals.... The PA theory can also go deeper the delegation chain to look at the principal-agent ties within international organisations that are specifically helpful in terms of identifying the degree to which IO leaders may understand their tendencies....
4 Pages
(1000 words)
Essay
Managerial Economics Table of Contents Table of Contents 2 Introduction 3 A Brief Study of Principal-agent theory (PAT) 4 Key Requirements That Should Possibly Meet By an Optimal Incentive System (OIS) 6 Application of PAT to the Financial Sector Concerning Bank CEOs 8 Conclusion 11 References 12 Introduction Incentive systems are generally regarded as the techniques of motivating employees to perform activities in accordance with the objectives of an organisation.... This discussion intends to analyse the principal-agent theory (PAT) in order to identify the issue of incentive system design in relation to financial sectors....
8 Pages
(2000 words)
Essay
The Stakeholder theory implies that a business has to interact with a number of parties in the environment.... This theory can be viewed as instrumental, descriptive or normative.... Presence of any relationship between the stakeholders and the profitability denotes the instrumental nature of the theory (Hooghiemstra, 2000, pp.... Explanation of the past, present and future of the business and the stakeholders denotes the descriptive nature of the theory....
6 Pages
(1500 words)
Essay
hellip; This paper deals with Principal-agent theory and fiduciary duty with reference to the above mentioned case.
Principal-agent theory: A certain relationship exists between two parties, namely the principal and the agent, in the event of a contract.... This paper deals with Principal-agent theory and fiduciary duty with reference to the above mentioned case.... Principal-agent theory: A certain relationship exists between two parties, namely the principal and the agent, in the event of a contract....
2 Pages
(500 words)
Essay
5 – 7), principal-agent theory is defined as “an economic theory of cooperation with respect to the utilization of scarce resources in a world where externalities and imperfect information prevails”.... In relation to the use of principal-agent theory, this study will provide some strategic ways on how ownership and control problems should be overcome.... As part of going through the main discussion, some real-life case situations will be analyzed using the principal-agent theory framework....
4 Pages
(1000 words)
Essay
The paper 'Corporate Governance Principles' presents every company which should be headed by an effective Board which is entirely in fully focused on the performance and success of the company.... This is because, for the extractive industry, the board will provide leadership.... hellip; At the head of the company, there should be a distinct division of responsibilities between the executive arm running the company business and the running of the board....
8 Pages
(2000 words)
Assignment
The principal–agent theory can be defined as a situation where an agent chooses to work for another party, namely the principal, in order to be able to gain certain incentives.... While this agreement may be highly favourable for the principal, it is often very risky for the… In such a situation, the agent might be forced to pursue its own agenda in order to be able to gain something out of the entire transaction.... Because of the massive costs that the agent incurs, it is normal for the agent o work towards the fulfilment of its own interests in total disregard of the individuals whom it is representing, and in such a situation it is possible that the principal is the one most likely to suffer (Crane & Matten, 2003, p....
4 Pages
(1000 words)
Essay