Agency : An Australian Company

The agency problems or conflicts are continuously happening between the principal and the agent. It particularly arises when an interest conflict occurs between the principal and the agent. In terms of finance, there are two core agency relationships; managers and stockholders and managers and creditors. To balance the interests and satisfactions between managers and stockholders which helps firm to improve performance, there are a variety of different measures have been generated and implemented by Telstra in order to optimize the bond and monitoring costs.

The scope of this paper is to analyze the kind of agency problems that emerges between The Hershey Company and their stakeholders and shareholders. To answer this, a review of the company`s board structure and ownership structure was made. Thereafter two specific situations that has occurred in recent times was used as case examples to enlighten the agency problems suggested to emerge by the corporate structure.

None of the two parties is considered superior to the other. Their interests are taken care of under the corporate policy. The theory advances on the incentives that should be offered to the agents in order to motivate them to work in line with the objectives of the company. The theory suggests that the incentives that promote moral misconduct by the agents should be eliminated. This forces the companies to develop rules that discourage moral hazard. The SWM model fails to promote the interests of all parties that form a company. Its main focus is on the shareholders. However, the agency theory successfully considers the interests of both the principals and agents. Therefore, the application of agency theory promotes social welfare and fair treatment of all the

Managers and shareholders are the utmost contributors of these conflicts, hence affecting the entire structural organization of a company, its managerial system and eventually to the company's societal responsibility. A corporation is well organized with stipulated division of responsibilities among the arms of the organizational structure, shareholders, directors, managers and corporate officers. However, conflicts between managers in most firms and shareholders have brought about agency problems. Shares and their trade have seen many companies rise to big investments. Shareholders keep the companies running

This situation can lead to negative consequences for a business when its executives or management direct the organization to act in the best interest of themselves instead of the best interest of its owners or shareholders. Stockholders of the enterprise can keep this problem from arises by attempting to align the interest of management with that of themselves. This normally occurs through incentive pay, stock compensation, or other similar incentive packages that now cause the managers financial success to be tied to that of the company (Garcia, Rodriguez-Sanchez, & Fdez-Valdivia, 2015; Cui, Zhao, & Tang, 2007; Bruhl, 2003; Carols & Nicholas,

Describe the types of activities that you participated in, tasks completed, etc.- While volunteering at good life I was in charge with the help of the other volunteers and paid staff to look after and promote the importance of healthy active living with members children. I helped run games and activities to promote physical activity with the children from ages 6 months to 12 years of age. I was also able to assist with the in take of children and filling out the necessary paper work for the children to be dropped off. I was also in charge of helping clean up and assist in the maintence of the jump room like sweeping and sanitizing toys. While volunteering for Saint Vincent’s place myself and two of my classmates participated in the coldest night of the year. We worked together to raise money for the 5km walk that we participated in.

Consequently, many studies on the CG have justified their argument on the existence of information asymmetry between managers and stockholders of the company based on the agency theory, which is defined as a contract under which one party (the principal) delegates another party (agent) to perform some services on their behalf

Austral Pvt. Ltd deals with import and exporting food product in various part of globe. Dairy, fish, meat and seafood product are the product they trade with. The firm would have the greatest competitor risk in import and export business is the duplication and quality of goods. These competitors company advantage of the lower cost of expenses such as materials, Inventories and labour cost to produce the product to the same consumer market. Natural risks if they mentioned, then earthquakes, floods, landslides and storms were decrease consumer, delay the transportation and deliver and distribution of products. In case of food products maintaining quality of food become most challenging part. However, misstatement of accountability is negatively impacting on financial position of company.

The consequence of these problems is that the principals may lack trust in their agents and they may therefore need to put in place mechanisms, such as audit, to reinforce this trust. Agency theory is concerned in solving these problems that arise in an agency relationship. A simple agency theory model suggests that, as a result of information asymmetry and self-interest, principals lack reasons to trust their agents and will seek to resolve these concerns by putting in place mechanisms to align the interests of agents with the principals and to reduce the scope for information asymmetry and opportunistic behaviour (Audit Quality Forum, 2005). According to Jensen and Meckling (1976), agency theory attempts to describe the agency relationship in the form of a metaphorical contract. That is, agency theory is a contract in which the principal is represented by management in executing the strategic goals and objectives and the auditors in providing assurance in their

As discussed in another article, the modern corporation can be conceptualized in a variety of ways. The set-of-contracts view illustrates that relationships between and among multiple stakeholders is complicated and provides many opportunities for one party to gain at the expense of another party. The Theory of Principal-Agent Relationships recognizes that there can be friction between relationships when one person acts for someone else.

Recent years, agency problem gradually becomes a hot issue and attract many researchers. The researchers try to find the cause and effect concerned with agency problems, such as dividend payouts, corporate governance and so on.

Agency Theory, contracting costs, and firm value is the relevant issue pertaining to the case. Agency theory, contracting costs, and firm value are all predicated on aligning incentives with benefits. This alignment creates an atmosphere where all stakeholder groups have a vested interest in the company. Contracting theory for example pertains to issue of executive compensation and aligning incentives to maximize the WHK shareholder wealth. Agency theory pertains the relationship (or lack thereof) between an individual and those that represent the individual. This occurs when management does not act in the best interests of shareholders, as is the case with WHK. Both concepts relate to firm value as misplaced incentives can lower the

Ivanovic Djukic and Predic (2010) show that exceptionally valuable measure is the code of corporate administration that permits stakeholders to perform agreeing their privileges and energizes straightforwardness of the topmost supervisors (Predic and Ivanovic–Djukic, 2010). Hence, in the research paper, we are going to explain and discourse about the approach taken to solve the ethical concerns or conflict amid shareholders and firm managers known as agency problem or conflict.

Agency costs are inevitable within an organization whenever shareholders are not completely in charge; the cost can usually be best spent on providing proper material incentives and moral incentives for agents to properly execute their duties, thereby aligning the interests of shareholders (owners) and agents.

As explained by Schelker (2013), the agency problem between the owners and the management of a firm is at the heart of the corporate governance literature. Hence, there is a need for a