This document summarizes an academic journal article from 1992 about applying agency theory concepts to marketing management. It discusses several key ideas:
1) Agency theory can help explain relationships within marketing organizations where one party (the principal) delegates work to another (the agent). This includes relationships with external agencies as well as internal employees.
2) Issues that can arise pre-contract include information asymmetry about an agent's abilities. Screening, signaling, and self-selection can help address these issues.
3) Post-contract issues center around agent performance and incentives. Contracts aim to align agent actions with principal goals while balancing risks. Monitoring and outcome-based incentives are two approaches.
3) The challenges of
RoIT - How to Justify Information Technology (IT) and Other Programs via ROI
The word is out. Management and financial officers no longer accept vagaries, such as: "It's a must for corporate survival to stay competitive", " We owe it to ourselves to go ahead with this new initiative, our competitors are", "It will help leverage our present IT or technology infrastructure", "We'll be at the frontier of knowledge and ahead of the game"......
The fact that you must now compete for scarce corporate investment dollars with other projects, and the fact that purely intangible considerations are no longer enough to justify investments forces CIOs, IT executives, technologists and operations personnel to a) prepare pragmatic proposals; and b) justify them in quantitative ROI terms in order to stand a chance of gaining approval for your vital investment initiatives.
Return on Investment is a term often mentioned but rarely defined or understood. As a result, IT and business managers find themselves struggling to develop some measure of technologyâs business value. For too many, the answer remains elusive.
In this workshop technical and business professionals will learn how to answer the fundamental question: "What is information technology worth?" And they will learn to do it in straightforward non-financial and financial terms.
Participants will learn about the "tangibles":
the traditional "financial measures" (NPV, IRR, payback) in easy to understand terminology
why the actual calculations are the easy part
how to solve the real challenge - deciding what numbers to use and where to find them
Participants will also learn how to show ITâs value when traditional monetary measures simply canât tell the story. For example:
Will the organization be better off as a result of this project and expenditure? How?
What tangible changes in key business operations can we expect? How much?
We know security is important, but how much is improved security worth?
What is the value of better information or faster access?
What do we get for our investment in infrastructure?
Participants will leave this workshop with:
a new way of thinking about ITâs value,
tools and techniques for quantifying business value, the ability to communicate ITâs value in clear, tangible terms that business decision makers will understand.
Decision-makers will get clear, concise, and actionable requests
The document discusses identifying stakeholders and conducting stakeholder analysis. It defines stakeholders as any entity with interest in a policy or reform. Stakeholder analysis helps identify existing support and opposition to change, and focuses efforts on building partnerships. The analysis involves collecting data on stakeholders' interests, influence, and impact from potential changes through interviews and questionnaires. Stakeholders are then mapped on a matrix based on their interest and power to identify those who can enable or resist changes. The results of the analysis inform a communication plan to effectively engage different stakeholders.
Montagu Place Hotel has identified its key stakeholder groups as employees, suppliers, and distributors. Employees have high power and interest given their direct role in operations. Suppliers have medium-low power but high interest, while distributors have high power through online bookings but medium-low interest. Montagu Place aims to build strong, partnership-like relationships with employees and suppliers through commitment, shared values, and cooperation. With distributors, the relationship focuses more on accountability and using technology to maximize profits for both parties.
The document provides an overview of business planning and the business planning process. It discusses that business planning involves setting goals, forecasting the future, and organizing activities to achieve desired goals. Business plans are used both internally for management purposes and externally to obtain financing from investors and lenders. The key sections of a business plan typically include an executive summary, market analysis, value proposition, marketing/sales plan, management team, and financial projections. Developing a thorough business plan helps avoid surprises, organize complexity, align stakeholders, and improve business efficiency.
This document outlines a presentation on influencing stakeholders in procurement. It discusses applying the success factors of sales professionals, such as empathy and focus, to procurement professionals. It also covers key concepts related to influence, like the seven types of power. Three models for influencing stakeholders are presented: a 5-step model of telling the impact, understanding challenges, sharing solutions, reminding of benefits, and gaining agreement; 7 tactics like rational persuasion and consultation; and a push/pull model of raising or lowering a stakeholder's status. Exercises are used to practice implementing these factors, concepts, and models for influencing stakeholders.
Companion deck to the blog post, Why your big ideas should be in a box.
http://bit.ly/1ahb2YW
How various abstract concepts have been captured visually, and become iconic.
WhiteBoard to Dashboard: Steps to implementing compliant and risk-free procur...Zycus
Â
In this presentation, Procurement Insights' Jon Hansen and a panel of industry experts examine the challenges of implementing a risk management and compliance initiative, and how procurement professionals can collaboratively develop a sound and proactive go-to strategy for their organization.
RoIT - How to Justify Information Technology (IT) and Other Programs via ROI
The word is out. Management and financial officers no longer accept vagaries, such as: "It's a must for corporate survival to stay competitive", " We owe it to ourselves to go ahead with this new initiative, our competitors are", "It will help leverage our present IT or technology infrastructure", "We'll be at the frontier of knowledge and ahead of the game"......
The fact that you must now compete for scarce corporate investment dollars with other projects, and the fact that purely intangible considerations are no longer enough to justify investments forces CIOs, IT executives, technologists and operations personnel to a) prepare pragmatic proposals; and b) justify them in quantitative ROI terms in order to stand a chance of gaining approval for your vital investment initiatives.
Return on Investment is a term often mentioned but rarely defined or understood. As a result, IT and business managers find themselves struggling to develop some measure of technologyâs business value. For too many, the answer remains elusive.
In this workshop technical and business professionals will learn how to answer the fundamental question: "What is information technology worth?" And they will learn to do it in straightforward non-financial and financial terms.
Participants will learn about the "tangibles":
the traditional "financial measures" (NPV, IRR, payback) in easy to understand terminology
why the actual calculations are the easy part
how to solve the real challenge - deciding what numbers to use and where to find them
Participants will also learn how to show ITâs value when traditional monetary measures simply canât tell the story. For example:
Will the organization be better off as a result of this project and expenditure? How?
What tangible changes in key business operations can we expect? How much?
We know security is important, but how much is improved security worth?
What is the value of better information or faster access?
What do we get for our investment in infrastructure?
Participants will leave this workshop with:
a new way of thinking about ITâs value,
tools and techniques for quantifying business value, the ability to communicate ITâs value in clear, tangible terms that business decision makers will understand.
Decision-makers will get clear, concise, and actionable requests
The document discusses identifying stakeholders and conducting stakeholder analysis. It defines stakeholders as any entity with interest in a policy or reform. Stakeholder analysis helps identify existing support and opposition to change, and focuses efforts on building partnerships. The analysis involves collecting data on stakeholders' interests, influence, and impact from potential changes through interviews and questionnaires. Stakeholders are then mapped on a matrix based on their interest and power to identify those who can enable or resist changes. The results of the analysis inform a communication plan to effectively engage different stakeholders.
Montagu Place Hotel has identified its key stakeholder groups as employees, suppliers, and distributors. Employees have high power and interest given their direct role in operations. Suppliers have medium-low power but high interest, while distributors have high power through online bookings but medium-low interest. Montagu Place aims to build strong, partnership-like relationships with employees and suppliers through commitment, shared values, and cooperation. With distributors, the relationship focuses more on accountability and using technology to maximize profits for both parties.
The document provides an overview of business planning and the business planning process. It discusses that business planning involves setting goals, forecasting the future, and organizing activities to achieve desired goals. Business plans are used both internally for management purposes and externally to obtain financing from investors and lenders. The key sections of a business plan typically include an executive summary, market analysis, value proposition, marketing/sales plan, management team, and financial projections. Developing a thorough business plan helps avoid surprises, organize complexity, align stakeholders, and improve business efficiency.
This document outlines a presentation on influencing stakeholders in procurement. It discusses applying the success factors of sales professionals, such as empathy and focus, to procurement professionals. It also covers key concepts related to influence, like the seven types of power. Three models for influencing stakeholders are presented: a 5-step model of telling the impact, understanding challenges, sharing solutions, reminding of benefits, and gaining agreement; 7 tactics like rational persuasion and consultation; and a push/pull model of raising or lowering a stakeholder's status. Exercises are used to practice implementing these factors, concepts, and models for influencing stakeholders.
Companion deck to the blog post, Why your big ideas should be in a box.
http://bit.ly/1ahb2YW
How various abstract concepts have been captured visually, and become iconic.
WhiteBoard to Dashboard: Steps to implementing compliant and risk-free procur...Zycus
Â
In this presentation, Procurement Insights' Jon Hansen and a panel of industry experts examine the challenges of implementing a risk management and compliance initiative, and how procurement professionals can collaboratively develop a sound and proactive go-to strategy for their organization.
What does CRM mean to you? Attendees heard about current obstacles and best practices. In addition, the Director of Business Banking at ESL Federal Credit Union talked about their CRM journey and what their ideal future state looks like. Learn how NextGen can fit into your CRM plans.
Overview Of Effective CRM Implementation And OperationAlan McSweeney
Â
The document provides an overview of effective customer relationship management (CRM) implementation and operation. It discusses key aspects of CRM including customer analysis and segmentation, implementation approaches, activity-based costing, data mining, and technology components. The document emphasizes balancing a focus on internal cost reductions with improving the external customer experience to maximize long-term customer value and profitability.
This document discusses stakeholder mapping as a tool for identifying and prioritizing stakeholders. It defines stakeholders as any group or individual that can affect or is affected by an organization's objectives. The classic view sees stakeholders as investors, customers, employees and suppliers, while the stakeholder view considers any group with a legitimate interest. Stakeholder mapping involves ranking stakeholders on scales of influence over and importance to the organization. This places stakeholders into a matrix to identify high priority stakeholders with both high influence and importance, those requiring special engagement efforts due to high importance but low influence, and potentially risky stakeholders with high influence but misaligned interests.
This document provides an overview of strategy work from the perspective of Aravind Ratnam, who has experience in management consulting, corporate strategy roles, and as a current head of connected vehicle products and strategy. The document outlines Ratnam's career path, provides examples of strategy engagements he has led, and shares reflections on doing strategy work. It also discusses attributes of successful strategists and recommendations for those interested in pursuing a strategy career, including relevant coursework, people to follow, and books to read. The goal is to explore strategy as a viable career path and provide insights from Ratnam's experience in the field.
Feasibility analysis is a process that determines the viability of a business idea. It assesses the market potential, financial sustainability, and management capabilities required. The document outlines the key components of a feasibility analysis, including product/service analysis, industry/market analysis, organizational analysis, and financial analysis. It provides details on how to evaluate the desirability and demand of a product or service idea, assess the attractiveness of the target industry and market, examine the management skills and resources required, and analyze the startup costs and financial projections. Conducting a thorough feasibility analysis early in the process can help screen ideas before dedicating significant resources.
The document discusses various stakeholder analysis techniques including identifying stakeholders, stakeholder analysis, stakeholder matrix, stakeholder register, force field analysis, Kano model, affinity diagrams, critical to quality tree, and SIPOC diagram. The purpose of stakeholder analysis is to understand how a project may impact different groups, reduce resistance to change, and effectively manage expectations.
Making Markets through Disruptive ManagementMalcolm Ryder
Â
This document discusses how disruptive forces are changing markets and management. New technologies like location services, social networks, cloud services, and big data are altering how customers make decisions and compete for their business. Rather than relying on internal planning and forecasts, management must adopt more dynamic, real-time tactics to influence customer preferences through these external forces. The key is for management to align their operations with how participants already use technologies to discover and procure what they want. By managing market operations to enable this, businesses can continually generate new customers rather than viewing customers as static.
150909 ECC Mtg. JPO Prsntn Formatted FinalJ. Paul Oxer
Â
1. Integration of acquisitions is a process, not a single phase, and requires dedicated management. Communication during integration is critical.
2. Attention to organizational culture differences between companies is one of the most significant challenges in acquisitions. Assessing culture early in the process and planning integration is important for success.
3. While deals often assume best case outcomes, integrations typically require more time, cost more, and generate less value than expected. Success requires a tailored approach and ongoing focus on people issues.
Stakeholder mapping is a process to identify and analyze stakeholders. It involves listing relevant groups, understanding their perspectives and interests, visualizing relationships, and prioritizing stakeholders. Several techniques can categorize stakeholders based on their power, influence, interest and other factors. This helps decision-makers understand which stakeholders support or oppose changes and prioritize engagement strategies. Three common matrices discussed map stakeholders based on power vs dynamism, power vs interest, and power vs legitimacy vs urgency.
The document discusses building and promoting a business case. It defines a business case as a written report or presentation that justifies a business initiative or project by showing it is financially sound and will address a business problem. It covers understanding business case basics like when they are needed and how they are approved, building a case by defining the problem, solution options and costs/benefits, and promoting a case to get approval. Best practices include considering long-term impacts, risks, qualitative factors and stakeholder engagement. A business case should address whether the proposal is strategically fit, optimizes value, is commercially viable, affordable and can be successfully delivered.
Given the current world of IT evolving and expanding all around the company, adopting and adapting innovations is not optional. The CIOâs most important role in business effectiveness is in managing this IT change to sustain the value of internal information.
Why Partners Who Charge for Technical Assessments Have Higher Growth and ProfitFortinet
Â
The document discusses how charging for technical assessments leads to higher growth and profits for IT solution providers. It argues that solution providers in the top quartile of financial performance typically charge for assessments, even for new customers, while lower performers usually do not charge. Charging allows for higher quality assessments and identifies more value drivers for the customer. It also helps differentiate the solution provider and access higher-level decision makers. This positions the provider to pursue and win more deals with high value customers, defined as those seeking premium solutions. The typical pre-sales process of doing free assessments often fails to differentiate the provider sufficiently. By charging for assessments, it creates an exception in the customer's procurement process that gets the provider's proposal in front of senior
Stakeholder mapping involves identifying key stakeholders, analyzing their perspectives and interests, mapping relationships between stakeholders and objectives, and prioritizing engagement. It is a process of researching stakeholder groups to understand their needs and how they relate to a business or project. This helps identify strategies, relationships that need establishing, blockers and facilitators of change, and socioeconomic trends. Stakeholder mapping breaks the process down into identifying relevant stakeholders, analyzing their views and influence, visually mapping relationships, and ranking stakeholders to focus engagement efforts.
1) The document discusses the concept of agency and its potential uses and applications in archaeology. It outlines the early development of agency theory through thinkers like Bourdieu and Giddens.
2) Agency can help archaeologists study individual actions and social change over time by examining patterns in material culture that represent shared behaviors or "doxa". Identifying changes in doxa may reveal instances of individual agency.
3) The document argues that for agency theory to truly impact archaeology, archaeologists must develop methods specific to identifying agency in the archaeological record and use agency to help interpret issues like technology, social roles, and worldviews.
This document discusses various theories of capital structure and their impact on firm value. It begins by explaining the net operating income, traditional, and net income approaches. It then summarizes the Modigliani-Miller hypothesis without and with taxes. It discusses how taxes make debt financing advantageous via interest tax shields. However, costs of financial distress and agency costs limit this advantage. The trade-off theory and pecking order theory are also covered. Finally, it discusses approaches to establishing an optimal capital structure.
Jensen Meckling Agency Theory Presentation LuomaBreatheBusiness
Â
The 1976 article by Jensen and Meckling introduced the concept of agency theory to analyze conflicts of interest between managers and owners of firms. It defined agency costs as the costs of monitoring, bonding, and residual loss incurred to mitigate divergences from shareholders' interests due to differing goals of managers. The paper also viewed the firm as a legal fiction serving as a nexus for contracts between individuals with conflicting objectives, rather than as a single maximizing entity. It integrated prior research on property rights, organization theory, and incentives to develop a new understanding of corporate ownership structure.
The document discusses several capital structure theories:
- The Modigliani-Miller model establishes that firm value is independent of capital structure under certain restrictive assumptions.
- The trade-off theory recognizes that while debt provides tax benefits, it also increases financial distress costs at higher leverage levels.
- Agency theory suggests that debt can help reduce equity agency costs by limiting free cash flow.
- Signaling theory posits that capital structure decisions signal private information to investors.
- Overall, the optimal capital structure balances these factors and depends on firm-specific characteristics.
Agency & stewardship, A. Ghazinoori, Lecture 4, Advanced Theory in Organizati...Amir Ghazinoori
Â
This document discusses four main streams of research on organizations: why firms exist, agency theory, strategic management theory, and cooperative organizational economics. It focuses on explaining agency theory and stewardship theory. Agency theory argues managers may act in their own self-interest rather than shareholders, while stewardship theory proposes managers act as stewards aligned with organizational objectives. The document compares the key assumptions and perspectives of agency theory versus stewardship theory on issues like human motivation, governance structures, and risk orientation.
This document summarizes a study on the effect of corporate governance on the performance of Jordanian industrial companies listed on the Amman Stock Exchange. The study aims to determine if corporate governance and performance indicators are affected by proposed variables. It examines factors that may influence corporate governance and the effect of governance on performance measures like market price, market-to-book value, and price-to-earnings ratio. Data was collected from 44 randomly selected industrial firms over 2000-2007 and hypotheses were tested using statistical models to analyze the relationships between variables and corporate governance and performance.
The document discusses agency theory, which addresses the conflict that can arise between principals and agents in organizations. It defines key agency theory concepts like asymmetric information and defines agency theory assumptions around self-interest and bounded rationality. It provides examples of how agency theory applies to the relationship between shareholders and managers, and the role of audit committees in addressing agency problems. The document also discusses criticisms of agency theory and calls for making it more institutionally sensitive.
This document discusses corporate misgovernance and governance issues in India and other countries. It provides examples of corporate scandals in India like the Harshad Mehta case and preferential allotment scam. Examples from the US like the Worldcom and Enron scandals are also mentioned. Reasons for misgovernance like a closed economy and lack of regulatory frameworks are discussed. The document also covers various corporate governance models and theories. It examines the roles, composition and responsibilities of boards of directors. Benefits of good governance and issues regarding boards, disclosure, and shareholder rights are summarized.
What does CRM mean to you? Attendees heard about current obstacles and best practices. In addition, the Director of Business Banking at ESL Federal Credit Union talked about their CRM journey and what their ideal future state looks like. Learn how NextGen can fit into your CRM plans.
Overview Of Effective CRM Implementation And OperationAlan McSweeney
Â
The document provides an overview of effective customer relationship management (CRM) implementation and operation. It discusses key aspects of CRM including customer analysis and segmentation, implementation approaches, activity-based costing, data mining, and technology components. The document emphasizes balancing a focus on internal cost reductions with improving the external customer experience to maximize long-term customer value and profitability.
This document discusses stakeholder mapping as a tool for identifying and prioritizing stakeholders. It defines stakeholders as any group or individual that can affect or is affected by an organization's objectives. The classic view sees stakeholders as investors, customers, employees and suppliers, while the stakeholder view considers any group with a legitimate interest. Stakeholder mapping involves ranking stakeholders on scales of influence over and importance to the organization. This places stakeholders into a matrix to identify high priority stakeholders with both high influence and importance, those requiring special engagement efforts due to high importance but low influence, and potentially risky stakeholders with high influence but misaligned interests.
This document provides an overview of strategy work from the perspective of Aravind Ratnam, who has experience in management consulting, corporate strategy roles, and as a current head of connected vehicle products and strategy. The document outlines Ratnam's career path, provides examples of strategy engagements he has led, and shares reflections on doing strategy work. It also discusses attributes of successful strategists and recommendations for those interested in pursuing a strategy career, including relevant coursework, people to follow, and books to read. The goal is to explore strategy as a viable career path and provide insights from Ratnam's experience in the field.
Feasibility analysis is a process that determines the viability of a business idea. It assesses the market potential, financial sustainability, and management capabilities required. The document outlines the key components of a feasibility analysis, including product/service analysis, industry/market analysis, organizational analysis, and financial analysis. It provides details on how to evaluate the desirability and demand of a product or service idea, assess the attractiveness of the target industry and market, examine the management skills and resources required, and analyze the startup costs and financial projections. Conducting a thorough feasibility analysis early in the process can help screen ideas before dedicating significant resources.
The document discusses various stakeholder analysis techniques including identifying stakeholders, stakeholder analysis, stakeholder matrix, stakeholder register, force field analysis, Kano model, affinity diagrams, critical to quality tree, and SIPOC diagram. The purpose of stakeholder analysis is to understand how a project may impact different groups, reduce resistance to change, and effectively manage expectations.
Making Markets through Disruptive ManagementMalcolm Ryder
Â
This document discusses how disruptive forces are changing markets and management. New technologies like location services, social networks, cloud services, and big data are altering how customers make decisions and compete for their business. Rather than relying on internal planning and forecasts, management must adopt more dynamic, real-time tactics to influence customer preferences through these external forces. The key is for management to align their operations with how participants already use technologies to discover and procure what they want. By managing market operations to enable this, businesses can continually generate new customers rather than viewing customers as static.
150909 ECC Mtg. JPO Prsntn Formatted FinalJ. Paul Oxer
Â
1. Integration of acquisitions is a process, not a single phase, and requires dedicated management. Communication during integration is critical.
2. Attention to organizational culture differences between companies is one of the most significant challenges in acquisitions. Assessing culture early in the process and planning integration is important for success.
3. While deals often assume best case outcomes, integrations typically require more time, cost more, and generate less value than expected. Success requires a tailored approach and ongoing focus on people issues.
Stakeholder mapping is a process to identify and analyze stakeholders. It involves listing relevant groups, understanding their perspectives and interests, visualizing relationships, and prioritizing stakeholders. Several techniques can categorize stakeholders based on their power, influence, interest and other factors. This helps decision-makers understand which stakeholders support or oppose changes and prioritize engagement strategies. Three common matrices discussed map stakeholders based on power vs dynamism, power vs interest, and power vs legitimacy vs urgency.
The document discusses building and promoting a business case. It defines a business case as a written report or presentation that justifies a business initiative or project by showing it is financially sound and will address a business problem. It covers understanding business case basics like when they are needed and how they are approved, building a case by defining the problem, solution options and costs/benefits, and promoting a case to get approval. Best practices include considering long-term impacts, risks, qualitative factors and stakeholder engagement. A business case should address whether the proposal is strategically fit, optimizes value, is commercially viable, affordable and can be successfully delivered.
Given the current world of IT evolving and expanding all around the company, adopting and adapting innovations is not optional. The CIOâs most important role in business effectiveness is in managing this IT change to sustain the value of internal information.
Why Partners Who Charge for Technical Assessments Have Higher Growth and ProfitFortinet
Â
The document discusses how charging for technical assessments leads to higher growth and profits for IT solution providers. It argues that solution providers in the top quartile of financial performance typically charge for assessments, even for new customers, while lower performers usually do not charge. Charging allows for higher quality assessments and identifies more value drivers for the customer. It also helps differentiate the solution provider and access higher-level decision makers. This positions the provider to pursue and win more deals with high value customers, defined as those seeking premium solutions. The typical pre-sales process of doing free assessments often fails to differentiate the provider sufficiently. By charging for assessments, it creates an exception in the customer's procurement process that gets the provider's proposal in front of senior
Stakeholder mapping involves identifying key stakeholders, analyzing their perspectives and interests, mapping relationships between stakeholders and objectives, and prioritizing engagement. It is a process of researching stakeholder groups to understand their needs and how they relate to a business or project. This helps identify strategies, relationships that need establishing, blockers and facilitators of change, and socioeconomic trends. Stakeholder mapping breaks the process down into identifying relevant stakeholders, analyzing their views and influence, visually mapping relationships, and ranking stakeholders to focus engagement efforts.
1) The document discusses the concept of agency and its potential uses and applications in archaeology. It outlines the early development of agency theory through thinkers like Bourdieu and Giddens.
2) Agency can help archaeologists study individual actions and social change over time by examining patterns in material culture that represent shared behaviors or "doxa". Identifying changes in doxa may reveal instances of individual agency.
3) The document argues that for agency theory to truly impact archaeology, archaeologists must develop methods specific to identifying agency in the archaeological record and use agency to help interpret issues like technology, social roles, and worldviews.
This document discusses various theories of capital structure and their impact on firm value. It begins by explaining the net operating income, traditional, and net income approaches. It then summarizes the Modigliani-Miller hypothesis without and with taxes. It discusses how taxes make debt financing advantageous via interest tax shields. However, costs of financial distress and agency costs limit this advantage. The trade-off theory and pecking order theory are also covered. Finally, it discusses approaches to establishing an optimal capital structure.
Jensen Meckling Agency Theory Presentation LuomaBreatheBusiness
Â
The 1976 article by Jensen and Meckling introduced the concept of agency theory to analyze conflicts of interest between managers and owners of firms. It defined agency costs as the costs of monitoring, bonding, and residual loss incurred to mitigate divergences from shareholders' interests due to differing goals of managers. The paper also viewed the firm as a legal fiction serving as a nexus for contracts between individuals with conflicting objectives, rather than as a single maximizing entity. It integrated prior research on property rights, organization theory, and incentives to develop a new understanding of corporate ownership structure.
The document discusses several capital structure theories:
- The Modigliani-Miller model establishes that firm value is independent of capital structure under certain restrictive assumptions.
- The trade-off theory recognizes that while debt provides tax benefits, it also increases financial distress costs at higher leverage levels.
- Agency theory suggests that debt can help reduce equity agency costs by limiting free cash flow.
- Signaling theory posits that capital structure decisions signal private information to investors.
- Overall, the optimal capital structure balances these factors and depends on firm-specific characteristics.
Agency & stewardship, A. Ghazinoori, Lecture 4, Advanced Theory in Organizati...Amir Ghazinoori
Â
This document discusses four main streams of research on organizations: why firms exist, agency theory, strategic management theory, and cooperative organizational economics. It focuses on explaining agency theory and stewardship theory. Agency theory argues managers may act in their own self-interest rather than shareholders, while stewardship theory proposes managers act as stewards aligned with organizational objectives. The document compares the key assumptions and perspectives of agency theory versus stewardship theory on issues like human motivation, governance structures, and risk orientation.
This document summarizes a study on the effect of corporate governance on the performance of Jordanian industrial companies listed on the Amman Stock Exchange. The study aims to determine if corporate governance and performance indicators are affected by proposed variables. It examines factors that may influence corporate governance and the effect of governance on performance measures like market price, market-to-book value, and price-to-earnings ratio. Data was collected from 44 randomly selected industrial firms over 2000-2007 and hypotheses were tested using statistical models to analyze the relationships between variables and corporate governance and performance.
The document discusses agency theory, which addresses the conflict that can arise between principals and agents in organizations. It defines key agency theory concepts like asymmetric information and defines agency theory assumptions around self-interest and bounded rationality. It provides examples of how agency theory applies to the relationship between shareholders and managers, and the role of audit committees in addressing agency problems. The document also discusses criticisms of agency theory and calls for making it more institutionally sensitive.
This document discusses corporate misgovernance and governance issues in India and other countries. It provides examples of corporate scandals in India like the Harshad Mehta case and preferential allotment scam. Examples from the US like the Worldcom and Enron scandals are also mentioned. Reasons for misgovernance like a closed economy and lack of regulatory frameworks are discussed. The document also covers various corporate governance models and theories. It examines the roles, composition and responsibilities of boards of directors. Benefits of good governance and issues regarding boards, disclosure, and shareholder rights are summarized.
Agency theory examines conflicts of interest that arise between parties in a principal-agent relationship, such as between shareholders and company managers. It aims to align their goals and reconcile different risk tolerances. Mechanisms for dealing with conflicts include incentive-based executive compensation, shareholder monitoring and intervention, and the threat of firing or takeover. Agency costs refer to the costs shareholders incur to encourage managerial wealth maximization over self-interest. The theory has implications for ethics in balancing principals' and agents' respective duties and interests.
Financial managers are responsible for investment, financing, and dividend decisions when managing corporate funds. The financing decision addresses how much capital to raise and what the optimal debt-to-equity mix is to maximize firm value. There are two major theories of capital structure: the trade-off theory and pecking order theory. The trade-off theory argues that firms balance tax benefits of debt against bankruptcy costs to determine an optimal debt ratio. The pecking order theory contends that firms prefer internal financing first, then debt, and equity as a last resort, so they do not aim for a target debt ratio. Key differences between the theories include whether firms have a target debt ratio, how profitability affects financing choices, and how well each
This document summarizes a webinar on agency remuneration trends. It discusses various remuneration models including commission fees, retainer fees, hourly rates, and project fees. It notes a shift from input-based models that reward volume to output and value-based models that reward effectiveness. Performance-based and incentive models that align agency and advertiser goals through shared risk and rewards are also discussed. The webinar covered criteria for measuring business, advertising, and agency performance for incentive programs.
This document discusses factors that influence goal congruence between individuals and organizations. It describes informal factors like external social norms, organizational culture, management style, and informal communication channels. Formal control systems involve rules, budgets, and performance evaluations. The document also outlines different types of organizational structures like functional, business unit, and implications for control system design. Controller functions are defined as designing control systems, financial reporting, performance analysis, internal audits, and developing accounting personnel. The controller's dual reporting relationship to business units and corporate is also discussed.
The document provides information on different phases of an insurance agency's evolution including buying an agency, building an agency to stay competitive and profitable, and selling an agency. It discusses the important considerations and steps involved in each phase, such as conducting due diligence when buying an agency, developing a growth strategy when building an agency, and factors to consider when negotiating a price and finding the right buyer when selling an agency. The overall document aims to educate agency owners on what they need to know to successfully acquire, grow, and sell an insurance agency at different stages.
The document discusses 3 perspectives on enterprise talent capability that talent leaders should know: 1) Sourcing - measuring the effectiveness of talent sourcing approaches, 2) Candidate Fit - measuring if the right talent is being sourced and are happy, and 3) Workforce Effectiveness - measuring the impact of talent on the enterprise. It notes challenges talent leaders face in accessing and understanding inconsistent and incomplete data from different systems, as well as cultural barriers. The goal is to provide actionable insights to help talent leaders achieve outcomes like minimizing costs and maximizing productivity, quality, and profit.
3 perspectives on performance that every talent leader should knowNewton Day Uploads
Â
The document discusses 3 perspectives on enterprise talent capability that talent leaders should know: 1) Sourcing - measuring the effectiveness of talent sourcing approaches, 2) Candidate Fit - measuring if the right talent is being sourced and are happy, and 3) Workforce Effectiveness - measuring the impact of talent on the enterprise. It notes challenges talent leaders face in accessing and understanding inconsistent and incomplete data from different systems, as well as cultural barriers. The goal is to provide actionable insights to help talent leaders achieve outcomes like minimizing costs and maximizing productivity, quality, and profit.
The document discusses several topics related to developing a high-level program business case. It provides definitions of a program and the purpose of a business case. The business case components are listed. It also discusses the differences between programs and projects, the interaction between program and project managers, identifying and analyzing stakeholders, and critical success factors.
How to Grasp terminologies like Strategy and operation in basic level, and demonstrate this understanding in real life , i am taking the hand for how the strategy and operation should work together for safe and sustainable business run
The document discusses the roles and responsibilities of sales executives. It notes that sales executives focus on short-term goals and objectives to achieve sales targets in the near future, while marketing management focuses more on long-term planning. Effective sales executives must be able to analyze information, consider alternative solutions, predict outcomes, and choose the best alternative. Key functions of salespeople include prospecting, communicating, allocating resources, and servicing customers. The document also outlines important qualities for sales executives and discusses their relationships with top management and other marketing departments. Finally, it lists various compensation patterns commonly used for sales executives.
Digital Marketing Measurement Framework - Martin WalshMartin Walsh
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A Digital Marketing Measurement Framework to assist your organisation to understand, develop, introduce and operationalise digital marketing measurement.
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Risk management has always been an integral part of business. But over the last two decades, a host of corporate scandals, security threats, recessions and a myriad of other crises have pushed risk management to the forefront of business strategy. Organizations are striving to manage and monitor risks more effectively, but many companies can?t seem to get beyond the theory and practically implement an effective ERM program. Join JetBlue Airways and Granite Consulting Group as they discuss practical ways of implementing ERM and how JetBlue evolved their risk program and created a strategically focused risk evaluation process setting the direction for future risk mitigation and operational improvement. Attendees will learn to go beyond linear "top 10" surveys and to incorporate practical and actionable strategies to implement an effective ERM program.
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The document summarizes the key points from the article "Manage your Human Sigma" by John H. Fleming, Curt Coffman, and James K. Harter. It discusses how measuring and managing customer and employee engagement locally can lead to improved financial performance. Specifically, it states that focusing on reducing variability in customer experiences and employee implementation processes at the local level is important. Centralizing responsibility for metrics like "human sigma" which measures customer and employee engagement can help organizations identify and address issues to increase overall performance.
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We know we want to create products which our customers find to be valuable. Whether we label it as customer-centric or product-led depends on how long we've been doing product management. There are three challenges we face when doing this. The obvious challenge is figuring out what our users need; the non-obvious challenges are in creating a shared understanding of those needs and in sensing if what we're doing is meeting those needs.
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⢠Demonstrate the best approach to selection and prioritization of user-goals to address
⢠Highlight the crucial benchmarks, observable changes, in ensuring fulfillment of customer needs
1. Mark Bergen, Shantanu Duytta &
Oroville C. Walker, Jr.
Journal of Marketing, July, 1992
Presented by: Doroteia VÄduva, Yenita Mulia, and Theodore Hile
MF455 Distribution Strategies
November 5, 2010
2. ď May improve understanding ofâ
⢠Why organizations exist
⢠How organizations work
⢠This viewpoint may be arguable, however...
ď What is clear:
⢠Agency theory is applicable to marketing
management
3. ď Anagency relationship is present when
one party is dependent on another for
some action on the Principalâs behalf.
4. ď The hiring firm, or manager representing
the ownerâs interests, is the Principal.
ď The employee is the Agent.
ď Multiple
employees in multiple levels within
marketing organizations require
management of agency relationships.
5. ď Facilitating
agenciesâspecialists in
implementation of marketing programs:
⢠Advertising agencies
⢠Public warehouses
⢠Research suppliers
ď âExchange-transactionâ facilitators:
⢠Wholesalers
⢠Retailers
⢠Franchisees
⢠...and even...customers!
6. ď Agency theory uses metaphor of âcontractâ
to describe relationships where one party
delegates work to another
ď Focus of theory is on determining the most
efficient contract to govern the relationship,
given participant nature and any
uncertainty in environment
7. ď âContractsâ can be either....
⢠Formal and explicit, written documents
⢠Informal and implicit, âsocial contractsâ
ď Over-riding assumptionsâ
⢠Efficiency is determined from the Principalâs point
of view
⢠The Principal is the dominant party in the
relationship
⢠Contracts are implemented to deliver the best-
possible outcome for the Principal
8. ď Pre-Contractual problemsâ
⢠Focused on Agent capabilities, skills
⢠Principal seeks to determine Agent suitability
⢠Principal must use good judgment and good
information strategy to make Agent-selections
⢠Environmental conditions and uncertainty are
constraints on action and solutions
⢠Goal: Develop framework for dealing with
problem of âhidden informationâ
ď This is âHidden Information Modelâ
9. ď Post-Contractual problemsâ
⢠Occur after contract-relationship is created
⢠Concerns about Agent performance and rewards
⢠Motivation toward Principalâs goals important
⢠Information system for Agent evaluations essential
⢠Creating appropriate Agent compensation and
incentive programs--
⢠Goal: Address problem of âhidden actionâ
ď This is âHidden Action Modelâ
11. ď Assumptions about Principal and Agentâ
⢠Both are motivated by self-interest
⢠Both are interested in maximizing profits/utility
⢠It is possible to include social goals in this context
(âthe double bottom-lineâ)
ď Principals have incomplete information
⢠Principalâs knowledge of Agent actions imperfect
⢠Self-interested Agent holds information Principal would
like to haveâ
⢠Self-interested Agent may be reluctant to share data,
may send false information to Principal
12. ď Realized outcomes areâ
⢠Partly determined by environmental factors:
ď Competitorâs actions
ď Technological changes
ď Agent behavior
⢠Uncertainty is present because...
ď Factors change over time
ď Changes are difficult to predict
ď Changes are outside control of Principal and Agent
⢠Uncertainty makes it impossible to craft a good
contract with minimal risk to Agent
13. ď Agent acts to maximize his/her utility by
choosing the best action available
ď Action may conflict with Principalâs goals
⢠Principalâs desired actions may be costly to Agent
(in terms of time, resources, effort)
⢠âShirkingâ is a risk when Agentâs own goals conflict
with Principalâs desires
ď Thereare two possible paths to follow to
gain Agentâs action toward Principalâs
desired goals...
14. ď Monitoring Agents...
⢠Principal can monitor and reward Agents based on
information about their behavior--
ď Call reports, attaining other activity goals
ď Sales-related activity (presentations, etc.)
⢠Drawbacks to this approach--
ď Quality of activity can be questionable
ď Collecting information can be costly
ď Information asymmetry can still inhibit most efficient
contract performance
15. ď Motivating Agents:
⢠Principal can motivate Agent with rewards biased
toward performing actions with â
ď Higher realized profits or better sales-volume outcomes
⢠Necessary conditions--
ď Goals must align with individual rationality of Agent
ď Desired activity payoff must be enough to beat
reservation utility of other opportunities
ď âFeed the dogs what they will eatââthis is incentive
compatibility (Agent and Principal both get what they
want)
16. ď Ultimate Principalâs goal:
⢠Design a contract that will obtain the âconstrained
bestâ outcome that is incentive compatible for the
Agent
ď Problem:
⢠Outcome based contracts shift substantial risk
from the Principal to the Agent...
⢠This can be costly for the Principal if the Agent is
highly risk-averse
17. ď Heart of âHidden Actionâ model problemâ
⢠Designing a contract that provides an efficient
trade-off between:
ď Costs associated with shifting risk to Agent...
ď Reducing probability of Agentâs âshirkingâ...
ď The solution is dependent on level of environmental
uncertainty, and...
ď ...tasks assigned to Agent, and...
ď ...goals and risk preferences of the two parties
19. ď Tackles problems arising fromâ
⢠Information asymmetry between Principal and
potential Agent
⢠Occurs prior to establishing a contractual
relationship
ď The Principal knows:
⢠Nature of tasks Agent must perform
⢠Personal characteristics Agent needs to perform
those tasks
ď Problem:How does a Principal establish
whether an Agent has desired traits?
20. ď Screening potential Agentsâ
⢠Observe sales personnel in action
⢠Administer aptitude tests
⢠Gain references from others about Agent
⢠Appoint Agent and evaluate performance later
ď Potential Drawbacks:
⢠Adds to costs of acquiring Agents
⢠Hiring wrong Agent leads to unsatisfactory
outcomes
ď While screening is costly, it may be
efficient compared to costs of a hiring
mistake
21. ď Agent actionââSignalingâ
⢠Potential Agent may perform actions showing âhe
is right for the jobâ
⢠Actions must meet criteria ofâ
ď Individual rationality
ď Incentive compatibility
ď Agent must be (in the end) better-off than if he/she had
done nothing
ď Potential Drawbacksâ
⢠Agent may send false signals
⢠Signals may not be clear/strong/precise enough
for differentiating among Agents
22. ď Principal
Actionâproviding for Self-
Selection:
⢠Principal can invite signals from Agents that may
be available
⢠Other choices can be constructed that induce
potential Agents to apply for consideration
24. ď Possesses some commonality with
âHidden Action Modelââ
⢠Howeverâ narrowly focused on intra-
organizational control structures
⢠Concerned primarily with corporate managers,
and inducing behavior consistent with goals of
firmâs stakeholders
⢠Assumes Agents are risk-neutral instead of risk-
averse
⢠This assumption is also found in transaction cost
economics
25. ď This model provides guidance onâ
⢠Design of compensation plans for marketing
executives
⢠Contingent compensation plans involving stock or
option plans are effective
⢠Compensation plans with bonuses tied to
performance are effective
⢠These plans motivate executives to behave in
accord with a firmâs strategic objectives and
positively related to shareholder wealth
27. ď Both concepts aid our understanding of
economic organization
ď Both concepts examine efficiency in
functional relationships
ď Both theories assume actors are spurred
by self-interest and can engage in
opportunistic behaviour
ď Both theories include outside variables
(asset specificity, risk preference)
28. ď Unit of analysis:
⢠TCA uses the âtransactionâ as its unit--
ď Analysis of how transactions differ
ď Implications of differences for designing structures
ď These items get little attention in agency theory
⢠Agency theory uses the individual Agentâ
ď Impact analysis of differences across different Agents
ď Emphasis on âhidden informationâ model
ď Use of âhidden actionâ model for designing incentives
29. ď TCA emphasizes ex post transaction
costs arising out of âincomplete contractsâ:
⢠Costs in transactions that are not well-aligned
⢠âHagglingâ costs to remedy misalignments
⢠High costs associated with remedying disputes
⢠âBonding costsâ of securing firm commitments
⢠Reducing costs by aligning transactions with
proper governance systems is typical of TCA
⢠Newer work gives more attention to individual
agents and crafting incentives toward trust and
commitment
30. ď AgencyTheory examines ex ante relations
between Principal and Agent:
⢠Proposes reducing ex post costs by ex ante
alignment of incentives
⢠Agency Theory pays little attention to costs from
incentive maladjustment other than to allow for
realignments to price them out
⢠Newer work focuses more attention on
âincomplete contractâ problem, seeks ex ante
alignment of incentives
32. ď SalesManagerâSalesperson link is
categorized as an agency relationship:
⢠Hiring, Controlling, Motivating sales personnel are
appropriate agency-theory issues
⢠Biggest issue in agency theory: Creating most-
appropriate compensation plans for sales
personnel
ď Salary:Commission ratio lower in high-uncertainty
environment where salesperson is risk-averse
ď Salary:Commission ratio higher in environments where
higher levels of non-selling activity is needed
33. ď Compensation systems for different
salesperson career-cycle stages:
⢠Early-career, high-risk sales environments
⢠Mid-to-late career, risk-averse sales personnel
ď Differentcompensation plans for different
kinds of selling jobs:
⢠Maintaining existing accounts
⢠Prospecting for new business, new product ideas
⢠âHidden Informationâ model may give insights into
better employee selection, training
34. ď Different reward systems:
⢠Pay plans based on relative performance vs.
plans based on absolute performance measures
⢠Job promotions, sliding-scale commissions,
bonuses, group-based incentives
⢠Use of mixtures of incentives
ď Use of different sales channels:
⢠Use of sales agents, manufacturerâs reps vs.
internal sales force
⢠Segmentation based on customer type or range of
products used
35. ď Measurement of:
⢠Environmental uncertainty
ď Risk preferences
ď Separating risk from other salesperson decisions
⢠Reservation utility
ď Impact of availability of other jobs on salesperson
choices
⢠Goals and risk preferences of salespeople
ď Different compensation plans for different areas of the
enterprise
36. ď Distributionchannel = set of agency
relationships
ď Resellers provide:
⢠Shelf-space
⢠Local advertising
⢠Point-of-purchase promotion
⢠Implementation of effective pricing strategy
ď Allocation
of rewards of the relationship
can be problematic, prone to conflict
37. ď Manufacturerscontrol resellers with
incentives compatible with firmâs goals:
⢠Pricing mechanisms--
ď Quantity discounts
ď Special transportation or payment terms
ď âTwo-part tariffsâ with fixed franchise fee
⢠Constraints on reseller actionsâ
ď Specific sales territories
ď Resale price maintenance (not legal in some places)
⢠Functional incentivesâ
ď Co-op ads, promotional allowances
38. ď Other efficient control methods:
⢠Franchising agreements--
ď These work best in uncertain environments where
monitoring reseller performance is difficult
ď Increase in margin offered by direct ownership of outlet
is offset by efficiency of franchise operator
⢠Other mechanisms worth consideration as
channel-partner power growsâ
ď Better quantity discount schedules can help partner
coordination
ď Allow resellers bargaining opportunities
39. ď Much previous research work is staticâ
⢠Dynamic elements should be considered to
understand appropriate incentives in shifting
conditions
ď Most agency models assume a single
Principalâ
⢠Models should consider competitive issues that
occur when many Principals deal with a single
Agent
40. ď Most Agency Theory models assume
resellers have no power in dealing with
Principalsâ
⢠Scanners, computerized inventory management,
(and now) the power of Web-based research tools
give both resellers and consumers power that is
skewed away from Principals
⢠Published work (ca. 1992) had not dealt with this
shift in power relationships
41. ď As
in Sales Force Management, there are
Channel issues in measurement of:
⢠Environmental uncertainty--
ď Risk tolerance, separating risk from Agent choices
⢠Reservation utility--
ď Impact of presence of other options for Agent choices
⢠Goals and risk preferences of Agents--
ď Different compensation plans for different territories or
market segments open to the reseller
⢠Use of secondary data impedes progress of
research efforts, measurements are imprecise
42. ď Consumers seek data on alternative
brands when making buying decisions
ď Information comes fromâ
⢠Manufacturers
⢠Distributors
⢠Retailers, others competing for customers
ď Crucial question:
⢠Are costs and revenues associated with promotion
valid and efficient for signaling differentiated high
quality from lower-quality competitor offers?
43. ď Agency models suggest âbigger is betterâ
in advertising spending to signal higher-
quality brands
ď Greater ad-spending also supports higher
prices
ď This has been shown to be an efficient
signal of product quality in worlds with both
âhidden informationâ and âhidden actionâ
problems
44. ď Price
premiums can signal product quality
when:
⢠Product quality cannot be assessed prior to
purchase
⢠Prospective customers are quality-conscious
⢠Seller does not have a well-established reputation
for quality
ď Thiscan be encouragement for
manufacturers to maintain product quality
over time
45. ď Signals of product qualityâ
⢠Many have been examined
⢠Full consideration of all promotional tools available
to marketers is not complete
⢠Combinations of tools may offer value
ď Other potential tools (variable in value):
⢠Extensive warranties (potential hidden action
problem inherent here)
⢠Consumer promotion with joint branding
ď Price-Qualitysignals may change over
time as information levels improve
46. ď Promotional tools may be useful for
shaping future consumer behavior
ď Agency theory assumptions about
advertising efficiency ignoreâ
⢠Perception of brand image
⢠Product positioning
⢠...other psychological factors impacting efficient
information transfer (encoding/decoding errors,
etc.)
47. ď As
in Sales Force Management and
Channel Control and Coordination...
⢠It is problematic to operationalize and measure
the effects of promotional tools
⢠Product quality measurements, and the validity of
pricing signals, while important as benchmarks,
can be subjective in nature
⢠Objective measurement tools are needed
48. ď International Marketing:
⢠Cross-cultural issues magnify uncertainty,
information asymmetry, and agent monitoring
⢠Research (to 1992) looked only at licensing and
direct investment issues
ď Industrial Buying Behaviour:
⢠Uncertainty and risk are higher here due to limited
number of players and technical information
issues
⢠âHidden Informationâ and âHidden Actionâ issues
can find happy homes here
49. ď Advertising Agency Issues:
⢠Relationships between firms and advertising
agencies pose a number of agency problems--
ď Excessive agency turnover
ď Inadequate screening and selection processes?
ď Poor signals of agency quality?
ď Disagreements over objectives, development of
conflicting accounts
ď Inefficient incentive and control systems for agencies
ď Outcome-based evaluation of advertising campaign success
as alternative to traditional commission structure?
⢠Another fertile field for investigation....
50. ď Agency theory seems most useful:
⢠In examining situations with factors unique to the
theory,
⢠Where those factors make contracting-with and
controlling Agents especially difficult.
ď Theory is best used whereâ
⢠Goal conflict exists between Principal and Agent
⢠Uncertainty is fairly high, triggering risk-sharing
⢠Information asymmetry is substantial
⢠Evaluating performance is difficult
51. ď As an economic theory, Agency Theory is
relatively simple and dominated by price
theory and self-interest considerationsâ
⢠This may not capture all the human dimensions of
action and marketing behaviour phenomena
⢠There is a lack of rigourous testing (ca. 1992),
which leads to questions about the theoryâs
validity and its general applicability
⢠Measurement issues complicate these
shortcomings
52. ď Agency Theory problems can be...
⢠Opportunities for market researchers to add to
development of theory
ď Agency-theory constructsâ
⢠are only partial views of the world
⢠combining them with marketing competencies
offers potential enhancements for both
ď Between marketer creativity and applied
measurement expertise, there is potential
for improved agency theory validation