answersLogoWhite

0


Best Answer

agency theory is to help devise techniques for describing the conflict inherent in the principal-agent relationship and controlling the situations so that the agent, acting from self-interest, does as little harm as possible to the principal's interest

User Avatar

Wiki User

13y ago
This answer is:
User Avatar
More answers
User Avatar

AnswerBot

4mo ago

Agency theory describes the relationship between principals (such as shareholders) and agents (such as managers) in organizations. It focuses on potential conflicts of interest that may arise when agents make decisions on behalf of principals and suggests mechanisms to align the interests of the two parties. The theory aims to address issues of agency cost, control, and monitoring to ensure that agents act in the best interests of the principals.

This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: How has the agency theory been described?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Related questions

What are the problems of agency theory to the financial manager?

The problem of agency theory are pricniple and agent.


Why is a theory never described as absolutely right or true?

Because it was just a theory and never been prove it can't be good or bad but it just a theory after all. and if this theory real and why don't they see what will happened in future!


What pattern is described by the theory of equilibrium?

The pattern described by the theory of punctuated equilibrium is that bursts of evolutionary activity are followed by long periods of stability.


What advantage agency theory?

Agency theory helps to align the interests of principals (shareholders) and agents (managers) by providing incentives for the agent to act in the best interest of the principal. Through mechanisms such as performance-based compensation and monitoring, agency theory aims to reduce agency conflicts and ensure that managers make decisions that maximize shareholder value. Additionally, agency theory provides a framework for understanding the relationships and responsibilities between principals and agents in a business setting.


What best described a theory?

a) an idea that has never been proven wrong


What is contained in the agency theory?

Agency theory is a theory explaining the relationship between principals, such as a shareholders, and agents, such as a company's executives. In this relationship the principal delegates or hires an agent to perform work. The theory attempts to deal with two specific problems: first, that the goals of the principal and agent are not in conflict (agency problem), and second, that the principal and agent reconcile different tolerances for risk.


How would you describe agency theory?

Agency theory pertains to the relationship between two parties; the first is the principal (or principals) and the second, the agent (or agents), who are engaged as employees or independent contractors.


What are the types of agency theory?

Two forms of agency theory have developed: positivist and principal-agent (Jensen, 1983). Positivist researchers have emphasized governance mechanisms primarily in large corporations.


How is the Jeans' Tidal theory described according to Sir James Jeans what happened?

jeans tidal theory


What theory did Einsteins theory of relativity replace?

Einstein's theory of relativity replaced the Newtonian theory of gravity proposed by Sir Isaac Newton. Newton's theory described gravity as a force acting at a distance, whereas Einstein's theory described gravity as a curvature in spacetime caused by mass and energy.


What did leucippus contribute to the atomic model or theory?

he did not develop anything regarding the 'atomic theory' for he was against that theory.


The theory of evolution is most accurately described as?

The central theory of modern biology, which illuminates all aspects of that science.