agency theory

Fin
a hypothesis that attempts to explain elements of organizational behavior through an understanding of the relationships between principals (such as shareholders) and agents (such as company managers and accountants). A conflict may exist between the actions undertaken by agents in furtherance of their own selfinterest, and those required to promote the interests of the principals. Within the hierarchy of firms, the same goal incongruence may arise when divisional managers promote their own self-interest over those of other divisions and of the company generally.

The ultimate business dictionary. 2015.

Look at other dictionaries:

  • Agency Theory — A theory concerning the relationship between a principal (shareholder) and an agent of the principal (company s managers). Agency theory is a very academic term. Essentially it involves the costs of resolving conflicts between the principals and… …   Investment dictionary

  • agency theory — The relationship between two parties, a *principal and an *agent, in which the latter represents or acts on behalf of the former. *Agency costs may arise if the goals of a principal and agent are not congruent: an agent, in other words, may be… …   Auditor's dictionary

  • Agency theory — The analysis of principal agent relationships, wherein one person, an agent, acts on behalf of anther person, a principal. The New York Times Financial Glossary …   Financial and business terms

  • agency theory — The analysis of principal agent relationships, in which one person, an agent, acts on behalf of another person, a principal. Bloomberg Financial Dictionary …   Financial and business terms

  • agency theory, financial — Introduction       in organizational economics, a means of assessing the work being done for a principal (i.e., an employer) by an agent (i.e., an employee). While consistent with the concept of agency traditionally advanced by legal scholars and …   Universalium

  • Agency-Theorie — Grundidee der Prinzipal Agent Theorie (P: Prinzipal, A: Agent) Die Prinzipal Agent Theorie (auch Agenturtheorie) ist innerhalb der Wirtschaftswissenschaft ein Teilgebiet der Neuen Institutionenökonomik. Sie bietet ein Modell, um das Handeln von… …   Deutsch Wikipedia

  • agency relationship — A relationship in which a principal engages an agent to perform some service on his or her behalf; this involves delegating authority by the principal. As it has to be assumed that the agent will not always act in the best interests of the… …   Big dictionary of business and management

  • agency relationship — A relationship in which a principal engages an agent to perform some service on his or her behalf; this involves delegating authority by the principal. As it has to be assumed that the agent will not always act in the best interests of the… …   Accounting dictionary

  • agency — 1. An alternative term for *agency theory. 2. An organization that performs intermediary services, such as hiring personnel or providing security services …   Auditor's dictionary

  • agency costs — The negative effects described in *agency theory of an *agent acting in self interest to the detriment of a *principal. For example, managers in a corporation may seek to enhance their own status and remuneration in defiance of the corporation’s… …   Auditor's dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.