Define What Constitutes an Agency Relationship and the Roles of the Principal

question 97

Essay

Define what constitutes an agency relationship and the roles of the principal and the agent; discuss how the agency relationship is reflected in the context of corporate diversification and when the agency relationship can be effective; and identify two common agency problems.

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Definitions:

Channel Richness

The capacity of a communication channel to effectively convey and clarify complex information.

Building Credibility

The process of establishing oneself or an organization as trustworthy and competent in a particular field.

Working Relationship

The interaction and communication patterns among colleagues within a workplace.

Feedback

The process of telling someone else how you feel about something that person did or said.