Agency theory has two principle lines: positivist and principal-agent, what are the differences? Which do you believe is a better predictor of behavior? Why?
There are two main Principle Lines (branches) of agency theory: 1. positivist agency theory, and 2. principal-agent theory. Differences: Researchers with the positivist theory have focused on (a.) identifying situations in which the principal and the agent desire opposing outcomes and (b.) describing governance mechanisms that control and regulate these principal and agent differences, especially for large public corporations. For example, equity ownership by managers can help align the interests of owners and managers, and the board of directors can serve as an information system that stockholders can use to monitor inappropriate behavior of top executives.
Principal-agent researchers have focused on a general theory of the principal-agent relationship that can be applied to all kinds of “acting for” relationships. This line of work is characteristic of formal theory, and involves precise specification of assumptions, logical deduction, and mathematical proof. Principal-agent research examines which kinds of contracts are the most efficient under various conditions, such as outcome uncertainty, outcome measurability and goal conflict.
Positivist Agency Theory is the better predictor of behavior
Because of usage of information systems that help the principal to verify the behavior of the agent that will lead in more probable behavior of agent in the interest of the principal.
Agency theory has two principle lines: positivist and principal-agent, what are the differences? Which do you...
What are some of the differences between developmental theories of anxiety and cognitive theories? Which theory do you believe has the most validity? Why?
In one to two paragraphs. Explain Agency Theory. Give two real examples of where the agent works against the interest of the company. How could governance help protect the company? Why did it not work well.
Explain several dimensions of the shareholder-principal conflict with manager-agents known as the principle-agent problem. To mitigate agency problems between senior executives and shareholders, should the compensation committee of the board devote more to executive salary and bonus (cash compensation) or more to long-term incentives? Why? What role does each type of pay play in motivating managers?
What do you understand by the principal-agent problem in Corporations? What is the role of the Board of Directors concerning this problem? Take an example of a publicly listed company and comment on their board composition- How many Directors? % of independent directors? Do you think they are diverse? Do you think they are active? (business law)
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four contemporary perspectives in sociology (functionalism, conflict theory, feminist theories, and symbolic interactionism). Which do you believe has the most merit in explaining the current economic situation in the United States and why? Please explain in detail.
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Which theory of deviance do you see as having the most efficacies: Differential Association Theory, or Control Theory? Why, or why not?