Principal Agent Theory

32478 Words130 Pages
극동대학교 Far East University 충북음성군 감곡면 왕장리 Angelo Carlo M. Rosario 국제개발대학원-국제경영학과 Graduate School of International Development Major in Business Administration The Principal-Agent Theory Angelo Carlo Rosario Business Ethics Spring Semester 2012 Dr. Orapin Sopchokchai June 06, 2012 Table of Contents Chapter 1 Executive Summary…………………………………………………………………….....1 Introduction………………………………………………………………………………..2 What is Agency Relationship? ……………………………………………………………3 Agency Theory…………………………………………………………………………….4 Critisms of Agency Theory………………………………………………………………..4 Importance of Agency Theory…………………………………………………………….6 Overview………………………………………………………………………………......7 Chapter 2 The Principal-Agent Theory………………………………………………………………8 Origins of Principal-Agent Theory……………………………………………………....10 Development of the Principal-Agent Theory…………………………………………….16 Agency Relationships……………………………………………………………………18 Types of Agency Relationships………………………………………………………….19 Levels of Agency Relationships…………………………………………………………20 Assumptions about Agency Relationship………………………………………………..22 Roles f Agency Theory…………………………………………….…………………….24 Corporate Considerations………………………………………………………………...32 Chapter 3 Principal-Agent Problem………………………………………………………………...33 Agency Problems………………………………………………………………………...33 Problem of Adverse Selection……………………………………………………….......34 Agency Cost and Variables………………………………………………………………38 Government Inefficiency.…………………………………………….………………….41 Maximizing Utility………………………………………………………………………41 Distorted Bonus Bonanza………………………………………………………………..42 Corporate Governance Failure…………………………………………………………...42 Chapter 4 What ethical Issues can arise with Agency Theory? ……………………………………44 Agency and Ethics……………………………………………………………………….44 Conflict of Interest……………………………………………………………………….45 Moral Hazard…………………………………………………………………………….45 Tacit

More about Principal Agent Theory

Open Document