Question

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Q1: Explain how agency conflicts arise in an organization. What are the appropriate solutions to reduce agency costs? Cite appropriate examples from Saudi Arabia Firms.

Answer 1

In an organization agency conflicts arise due to many reason because of cost which should bear by organization as a brand that agency have and reason is that organization not interest in buying that agency.

There are many solution for appropriate cost

1) Reduce the advertisement expenses.

2) Refuce Transportation Cost.

3) Reduce channel of intermediaries.

Example Saudi Arabia firm has take export charges and it is is far from other countries so export cost increase in agency cost and it has brand value that it is international brand so that cost also increase.