04_Overheads - shareholders. Stakeholder value principle...

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1 Agency theory Principal Agent decision rights Risk-neutral Goals Goals Risk-averse General knowledge Specific knowledge formal and informal performance measurement and control systems Information set Information set ACCY 302 (Chen) Class 04
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2 What are some of the agency  relationships in the crisis? Homeowners Mortgage  brokers Lenders Investment  banks Investors Rating Agencies AAA BBB ????? http://www.crisisofcredit.com / ACCY 302 (Farrell) Spring 2010, Class 04
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What principals should be served? Shareholder value principle Social welfare is best served if management focuses  exclusively on delivering maximum economic value to 
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Unformatted text preview: shareholders. Stakeholder value principle The worth of an organization is measured by a combination of financial success, usefulness to society, and satisfaction of employees. A middle ground Managers have multiple constituencies (shareholders, society, employees), but should manage relationships with them by considering the implications for the long-run interests of the shareholders. ACCY 302 (Farrell) Spring 2010, Class 04 3...
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This note was uploaded on 09/25/2010 for the course ACCY 302 taught by Professor Chen during the Fall '09 term at University of Illinois at Urbana–Champaign.

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04_Overheads - shareholders. Stakeholder value principle...

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