BUS 223 Lecture Notes - Lecture 10: Good Governance, Law Of Agency, Standard Model

• School: Ryerson University
• Department: Business
• Course: BUS 223
• Professor: Garrett Mac Sweeney

Document Summary

Can be used for good or bad. Something qualifies them, not solely for self-interest. (cid:862)posses a(cid:374) esoteri(cid:272) theoreti(cid:272)al k(cid:374)o(cid:449)ledge (cid:271)ase(cid:863) Huge industrial empires in railways, steel, oil and gas, tobacco were built. Note- cannot run a huge empire by yourself- one of main limits of entrepreneurships (cid:272)a(cid:374)(cid:859)t rel(cid:455) on family. Often decentralized (units geographically far from each other and head office) Often multidivisional (sub-units are separate companies, owned by the main company) Professionally-managed multidivisional firms can generally out-compete other firms: agency problem(s) A(cid:374) (cid:862)age(cid:374)t(cid:863) is so(cid:373)eo(cid:374)e e(cid:374)trusted (cid:271)(cid:455) so(cid:373)eo(cid:374)e (cid:894)(cid:862)pri(cid:374)(cid:272)ipal(cid:863)(cid:895) to do thi(cid:374)gs a(cid:374)d de(cid:272)ides things on their behalf. Owner vs (cid:373)a(cid:374)agers > eparatio(cid:374) of pro(cid:271)le(cid:373) (cid:858)separatio(cid:374) of o(cid:449)(cid:374)ership & (cid:272)o(cid:374)trol(cid:863) The structure by which corporations are managed, directed, and controlled toward the objectives of fairness, accountability, and transparency. The structure generally will determine the relationship between the board of directors, the shareholders or owners of the firm, and the fir(cid:373)(cid:859)s e(cid:454)e(cid:272)uti(cid:448)es or (cid:373)a(cid:374)age(cid:373)e(cid:374)t.