Explain the significance of finance in a business organization and the implications of agency relationships in...

Explain the significance of finance in a business organization and the implications of agency relationships in financial management.

Expert Solution

FINANCE is a very important function in a business responsible for multiple primary functions like acquiring and managing funds to enable the smooth operation and growth of the firm. A well planned and devised business and financial plan is essential for the growth and development of the firm.The importance of finance lies in its ability or capacity of this function to keep a business operating smoothly without running out of funds to tactical and strategic plans of the firm. Finance relies on multiple sub functions like accounting, financial management etc.

An agency relationship is a kind of fiduciary relationship in which the principal allows an agent to act on his or her behalf. Here for the business purpose the agent is subject acts as per the principal’s control and directive and must consent to her instructions. Few examples where we can see agency relationships include relationships between employer & employee, lawyer & client etc.

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Explain the significance of finance in a business organization and the implications of agency relationships in...

Explain the significance of finance in a business organization and the implications of agency relationships in financial management.

From a business perspective, discuss .... --why is it important to understand agency relationships? --what is...

From a business perspective, discuss .... --why is it important to understand agency relationships? --what is the relevance of an agent? --who is considered an agent AND who can be an agent?

Explain how agency conflicts arise in an organization. Whatare the appropriate solutions to reduce agency...

Explain how agency conflicts arise in an organization. What are the appropriate solutions to reduce agency costs? Cite appropriate examples from Saudi Firms. use your own words and do not copy from other resources.

Explain how agency conflicts arise in an organization. What are the appropriate solutions to reduce agency...

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

i) explain the term "agency relationships" and discuss the conflicts that might exist in the relationship...

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Agency theory is a management and economic theory that attempts to explain relationships and self-interest in...

Agency theory is a management and economic theory that attempts to explain relationships and self-interest in business organisations. It describes the relationship between principals/agents and delegation of control. It explains how best to organize relationships in which one party (principal) determines the work and which another party (agent) performs or makes decisions on behalf of the principal (Jensen and Meckling, 1976; Schroeder et al., 2011). Discuss

Question 1 Agency theory is a management and economic theory that attempts to explain relationships and...

Question 1 Agency theory is a management and economic theory that attempts to explain relationships and self-interest in business organisations. It describes the relationship between principals/agents and delegation of control. It explains how best to organise relationships in which one party (principal) determines the work and which another party (agent) performs or makes decisions on behalf of the principal (Jensen and Meckling, 1976; Schroeder et al., 2011).

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Explain the significance of finance in a business organization and the implications of agency relationships in...

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