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What is an agency relationship, and what is an agency conflict? How can agency conflicts be
reduced in a corporation
Solution
What is an agency relationship
Agency relationships develop when a principal hires an agent to perform some service or
represent the company.
what is an agency conflict?
An agency conflict arises when the agent’s interests and behaviors are at odds with
those of the principal.
How can agency conflicts be reduced in a corporation
A gency conflicts can be reduced through the following three mechanisms:
management compensation,
control of the company,
and the board of directors.

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  • 1. What is an agency relationship, and what is an agency conflict? How can agency conflicts be reduced in a corporation Solution What is an agency relationship Agency relationships develop when a principal hires an agent to perform some service or represent the company. what is an agency conflict? An agency conflict arises when the agent’s interests and behaviors are at odds with those of the principal. How can agency conflicts be reduced in a corporation A gency conflicts can be reduced through the following three mechanisms: management compensation, control of the company, and the board of directors.