Question

What are agency problems that may exist within a company? How can these issues be mitigated?

Answer 1

What are agency problems that may exist within a company? How can these issues be mitigated?

The agency problems that may exist within a company are:

• Change in agents’ role during a current project, which leads to non-ownership of issues and so problems of blame erupt
  • This can be mitigated by assigning duties at every change of role and proper knowledge and role transfer
• Replacement of agents, this leads to non-awareness of duties leading to non-performance and compliance issues
  • This can be mitigated if all of the work is documented and the task assignment is properly with the knowledge of line managers.
• Conflict of agent roles, there are several agents working on similar issues so there could be transgressing roles leading to ownership of goals and objectives, but non-ownership of problems.
  • So this can be mitigated if all the tasks are fully know and the issue categories are assigned to stakeholders and agents uniquely.