Business Administration 3300K Study Guide - Quiz Guide: Agency Cost, European Cooperation In Science And Technology, Network Effect
10 Nov 2020
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Mis session 3: the impact of information systems on organisations & Markets gurbaxani & whang: introduction, aim of paper: analyse impact of it on two important attributes of firm 1) firm size 2) allocation of decision making authority among actors in firm, agency theory. View of firm: set of agency contracts (nexus of contracts) under which a principal (entrepreneur) employs agents (employees) to perform some service on his behalf. Agency theory: agent has his/her objective in mind & pays no regard to welfare of principal or other virtues such as honour, team spirit, integrity, pride of achievement. 2. 2 agency costs & firms: shareholder-manager conflict: as result of separation of ownership and management agents who act in own interest at expense of shareholders. 2. 3 decision rights in organisations: employees usually have better access to local information so if all decision would be made at top management (centralised) the decision information cost would be very high.
