Question: Agency theory has been criticized for assuming that managers left
Agency theory has been criticized for assuming that managers, left on their own, will behave in ways that reduce the wealth of outside equity holders when, in fact, most managers are highly responsible stewards of the assets they control. This alternative view of managers has been called stewardship theory. Why would you agree with this criticism of agency theory?
Relevant QuestionsSuppose that the concept of stewardship theory is correct and that most managers, most of the time, behave responsibly and make decisions that maximize the present value of the assets they control. What implications, if any, ...Which elements of the M-form structure (the board of directors, the office of the CEO, corporate staff, division general managers, shared activity managers) should be involved in the following business activities? If more ...How can one tell whether two firms are engaging in an alliance to facilitate collusion or are engaging in an alliance for other purposes?Some researchers have argued that the existence of free cash flow can lead managers in a firm to make inappropriate acquisition decisions. To avoid these problems, these authors have argued that firms should increase their ...The transnational strategy is often seen as one way in which firms can avoid the limitations inherent in the local responsiveness/international integration trade-off. However, given the obvious advantages of being both ...
Post your question