most suitable goal of a business in a capitalist society although it lacks a clear and concise definition, because it not only brings risk but also return and the time value of money into a business (Denzil Watson & Antony Head, 2010). In addition, shareholder wealth maximization is a criterion of corporate governance that encourages a firm’s board of directors to implement all major decisions that preserve long-run shareholder wealth (S.Sharfman, 2015).Wealth of a business is represented by the market
2.0 Agency Theory and Corporate Governance Corporate Governance is a term used to refer to the processes, policies, regulations and customs by which a corporation is directed, administered and controlled. Corporate governance has been an integral part of the business practice since the creation of corporate structure and separation of ownership from control (Aguilera & Jackson, 2010). Corporate governance specifies the responsibilities and rights of various stakeholders in the organization, e.g
choices and take actions that will improve the welfare and benefit of society besides the organization. Basically history or concept of CSR is fairly not new one. It is in use from 1960s. In 18th century Adam Smith uttered classical economic model of business. This model propose that needs and wishes of society could finest be met by the unrestricted communication of individuals and organizations in market place. After a century, industrial revolution carried countless technological transformations leading
Should You Fire Your PPC Agency? A Webinar by Rob Sieracki and Perry Marshall PPC (Pay-Per-Click) Advertising is one of the different verticals of internet marketing in which businesses and companies get maximum returns for their investment. In this webinar, companies that seek for adequate knowledge would be able to choose and hire the right PPC agency that could help them in running online marketing campaigns or find out if their PPC agency knows what they’re doing; if not, should they fire
Title Introduction Statement of the problems (include definition of CSR, ownership structures) Under different ownership structures, whether there is relationship between financial performance and corporate social responsibility and whether there is difference? 2.If we find a difference under different ownership structures, this may be due to Agency problem? (Reasons behind) Agency Theory Agency theory is concern about the relationship between principal and agent. It describes the conflict
Business models exist in many forms, depending on the market they have to fit into, but if we consider the European one, we can state that there are essentially three main business models: the direct sale, the manufacturer and the franchise model. The franchise model, is maybe the most used in the world because of its simplicity and structure. The franchise model takes in consideration two essential ideas: the amplification of a business and the creation of new jobs in a new area. This business model
management and attaining key business indicators. ICT outsourcing was one of it. Technology outsourcing growth has been rapid globally. According to Claver and Gonzales (2002), ICT outsourcing has become a trend to some companies. ICT outsourcing can be defined as make change the perspective of company to focus on more important and core business for better decision–making. The ICT outsourcing strategy is widely related with cutting costs, launching of new business ventures and improving
(Berger & DeYoung, 1997) who studied the relationship between problem loans and cost efficiency of banks. Again, the focus on bank risk heightened after the financial crisis while that of firm performance is due to globalisation and competition among others. To understand the R-FP link, preceding studies have explored the risk theory of profit, prospect theory, too big to fail theory and agency theory. The theory of agency (principal-agent problem) is the conflict of interest that may arise between the
MODIGLIANI AND MILLERS THEORIES AND ITS WEAKNESS Arnold (2013) stated that financial economists Modigliani and Millers created a simplified model for capital structure decision by making some assumptions in 1958 (pp.830). The assumptions are that there is no taxation, perfect capital markets with perfect information available to all economic agents and no transaction costs, no costs of financial distress and liquidation, firms can be classified into distinct risk classes and individuals can borrow
It is therefore evident that the theoretical underpinnings of the monitoring board and the independent director concept emanate from the agency cost theory that relates primarily to the manager-shareholder agency problem. Acknowledgement of the majority-minority agency problem in the literature is sparse because academics were not confronted with the issue at all as they were primarily dealing with outsider systems of corporate governance. Emergence of Independent Directors in U.S. Corporate Practice