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Within the context of financial management, it is important that organizations attempt to align their managers' interests with that of the shareholders. However, agency conflict,
Within the context of financial management, it is important that organizations attempt to align their managers' interests with that of the shareholders. However, agency conflict, that is a conflict between the owners and the management agents of a firm can arise as agents prioritize their own interests ahead of the owners' interests of maximizing firm value. Examples of these are: a at times managers will take on less greater risk than they would if they were the owners of the firm and b due to the separation of ownership and control managers are able to entrench themselves within firms and have little risk of being replaced c using corporate resources for private use jets memberships, event access Provide a few examples of mechanisms that organizations could use to align the interests of both the owners of the firm and its managers.
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