In: Economics
In general way, a person is held liable on for the wrongful act done by him , but there few exceptional cases wherein a perosn is held vicariously responsible by the court for wrongful act done by others. This is known as vicarious liability.
In business , a supervisors are expected to embody the philosophy and values of the company and to avoid behaviour which reflect poor behaviour of the reputation of the company. But is the samw supervisor, ignores his responsibility to represent his employer on positive note , rather he exposes the reputation of the company by his actions and hence this creates the vicarious liability for his employer