Skip to main content

What is the Agency Cost for Business? Get financial mangers help!


The agency condition in an organization occurs when the major (shareholders or owner) and agent (manager) do not agree on what activities to take to improve trader’s success. Investors only want to hold stocks of companies in their investment stock portfolios that improve the success of the traders as they are traders.

This creates the organization problem of crucial importance. If traders think that there is an issue between control and traders within a organization, they will likely shy away from positioning the inventory of that 
organization.

Why does the organization problem exist? Professionals think that since they have some energy and power in the company, they can use it for their own advantage. The agency concern is persistent in our community. It is not just obvious in company. It also prevails in organizations, government departments, chapels, and many other types of companies.
Agency Costs

Dealing with the organization concern is not free. Unfortunately, there is a professional cost associated with interacting with the organization problem. Organization expenses usually fall under the type of managing costs. If workers of a organization take company and book themselves into the most expensive resort they can find or if they require on the best computer in the marketplace for their workplaces, those are cases of agency expenses. Those things do not improve the success of the traders but instead reduce it.

Monitoring managers regarding these kinds of personal costs is what creates up agency expenses. Tracking techniques include proper bookkeeping procedures, developing costs, and developing boundaries on expenses. Unfortunately, all agency expenses cannot be removed. The expenses of monitoring, at some factor, will surpass the organization expenses. At that factor, the concept of ethical threat goes into the formula. Moral risks occur when agents act in a self-serving manner without monitoring. All in all, monitoring expenses for the organization problem are an important part of a company's managing costs.

Financial management assignment help is accessible online from experts.They can provide Assignment help in many subjects. 

Resource article: http://www.expertsbuzz.com/

Comments

Popular posts from this blog

Different approaches to leadership represented on the jury

Rent the film, 12 Angry Men (there are at least two versions of it in town). As you view the film, analyze the group discussions and interactions dramatized in the film. Take notes that will provide you with specific examples to illustrate concepts related to small group communication. Issues for Analysis : Your analysis of the jury's process should address each of the five issues listed below (each section is worth 2 points). Describe in detail, specific examples from the film to support your conclusions. 1. Leadership : Describe two different approaches to leadership represented on the jury. What theory or theories do you think best explain(s) the leadership of this group? 2. Participation: Describe the task, maintenance and self-centered roles represented in the film. What were some of the participation problems confronted by the group? How did the group deal with these problems? Click here to view more on this paper Click here for Assignment Help with 100% accuracy from ...

Defining stock and debtors system

Under Stock and Debtors System, the head office does not open a Branch Account in its books. It maintains a few control accounts for recording the various branch transactions. These accounts usually are: (i) Branch Stock Account, (ii) Branch Debtors Account, (iii) Branch Expenses Account, (iv) Branch Cash Account (v) Goods sent to Branch Account, and (vi) Branch Fixed Assets Account. At the end of the accounting year, it prepares the Branch Adjustment Account and the Branch Profit & toss Account. This system is used only when goods are invoiced at , selling price which the branch is not allowed to vary. Let us now study the working of each account opened by the head office when such a system is followed. Branch Stock Account: This is the most important account which helps the head office in controlling the branch stock. It shows all branch transactions relating to goods. The goods sent to branches and the sales returns are shown on its debit side, and the sales (both cash and c...

Identify and describe the rule of law

1. Ken, grateful that Letisha performed life-saving CPR on him after he had suffered a heart attack, writes a document with the following language: "In consideration of Letisha Washington having saved my life, I hereby promise to pay her $250 per week for life. Signed [Ken Smith]." For the next 3 years, he faithfully makes the weekly payments, and then stops. Letisha, upset that Ken broke his word to her, sues him seeking to reinstate the payments. Was there a valid contract formed in this instance? Why or why not? 2. Imagine that Alexandra promises to give Rasputin $1000 if he stops drinking alcohol for one week. If Rasputin does so, is a contract formed ? 3. Sami walks into a restaurant. She is given a menu, which indicates that lobster is $30. Sami orders the lobster. It arrives, and Sami thinks it is very tasty. When the bill arrives, Sami tries to execute a clever ploy she learned about in her business law class. She writes a check to the restaurant for $20, and writes...