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13 May, 22:00

Which terms is defined as a conflict of interest between the corporate shareholders and the corporate managers?

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  1. 13 May, 22:52
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    Answer: Agency problem

    Explanation:

    Agency problem is the issue rises when the agents fails to display appropriate interest of principles. This interest conflict usually occurs between the organisation's stakeholder and management.

    In this situation, manger is the person who usually acts as the agent for providing best interest to the stakeholder to increase their wealth and benefit. But if failure in this case occurs, then conflict is experienced between both the parties.
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