The interests of managers and owners of a Company conflict.

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Managers in an agency relationship are to require to always act in the best interests of the
owners.
However, it is impossible to arrange the ‘perfect contract’ because decisions by the
managers (agents) affect their own personal welfare as well as the interests of the owners. This
gives raise to conflict of interests
Required
Identify and briefly discuss the different ways in which the interests of managers and owners of a
Company conflict.

 

 

 

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