How does the agency problem affect global organizations?

Agency problems are a conflict of interest essential in relationships with expectations of the parties acting in the best interest of one another. In organizations, the agency problem usually refers to a conflict of interest between company management and company stockholders. From a global standpoint, while the investors call on leadership to take care of the company, managers may first put their personal needs. For example, Goldman Sachs and the Real Estate Bubble. Goldman and Sachs and other stock brokerage houses developed mortgage-backed securities known as collateralized debt obligations and then sold the short betting that mortgages would go under foreclosure. The 2008 housing bubble dropped the collateralized debt obligations' values, and the short-sellers made millions of dollars. Meanwhile, millions of investors and homeowners lost nearly everything in the collapse.