What is agency conflict?

Business Dec 09, 2020

Expert Solution

Agency conflict is a problem that arises when a business organization (agent) does not act according to the will of its investors. It is a conflict of interest between management and stockholders. Business organization and its management are hired as an agent by the stockholders. They invest their money in the business organization and expect it to work according to their interest and benefits. When business management does not work in the best interest of its stockholders, then agency conflict arises.

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