Ethics and agency theory

de Norman E. Bowie, R. Edward Freeman

"This work focuses on agency theory, which involves what is known as the principal-agent problem, a topic widely discussed in economics and management, and which is fast becoming a concern in business ethics today." "Previously, little written about agency theory has included a discussion of ethics. This work examines both. In Ethics and Agency Theory, the authors demonstrate that it is a characteristic of nearly all modern business firms - that the principals (the owners and shareholders) are not the same people as the agents (the managers who run the firms for the principals). They show that this creates situations in which the goals of the principals may not be the same as those of the agents. The principals typically want growth in profits and stock price, while agents are generally concerned with growth in salaries and positions in the hierarchy. The self-interest of the manager is apparently in conflict with the manager's duty to owners." "This book explores the ethical consequences of agency theory through contributions by ethicists, economists, and management theorists. By bringing together such a varied group of contributors (such as Richard DeGeorge, Lisa Newton, J. Gregory Dees, Barry Mitnick, and Bill Lawson) the editors provide a forum in which to promote this important dialogue between ethicists and economists."--BOOK JACKET.