Agency Costs Index.pdf

f279ca_d1ad903decfa4e77bbba83b5238379d1.pdf
Preview of Agency Costs Index
🔗 Source: globecos.com
📊 Size: 1.11 MB
👤 Author: DarkSapphire
⬇️ Downloads: 177

Summary

The agency theory, introduced by Jensen and Meckling (1976), highlights the conflict of interests between management and shareholders, leading to agency costs. These costs arise when managers prioritize personal interests, reducing company benefits. The study aims to create a "Cost of Agency Index" to measure these costs, which negatively impact organizational profits. The key objectives are:

To identify the need for an index to measure agency costs
To develop a concept for the "Cost of Agency Index"
* To explore the relationship between agency conflicts and organizational costs

The research focuses on the conflicts between shareholders and management, and how these conflicts result in costs for the organization. The "Cost of Agency Index" is proposed as a solution to measure these costs, with the ultimate goal of minimizing their negative impact on organizational profits.

Description

Agency costs arise from conflicting interests between management and shareholders, as managers prioritize personal interests, increasing company costs and reducing benefits. Jensen and Meckling's (1976) agency theory explains this conflict. Shareholders bear the costs of managerial self-interest.

Technical Information

  • File Format: PDF
  • File Size: 1.11 MB
  • Pages: 15
  • Language: EN
  • Author: DarkSapphire
  • Total Downloads: 177
  • Last Updated: 1 week ago

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