what does mean by principale agency concept
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Explanation:
so sorry brow I am so busy so I am this answer tomorrow
Answer:
The principal–agent problem, in political science, supply chain management and economics occurs when one person or entity, is able to make decisions and/or take actions on behalf of, or that impact, another person or entity: the "principal".
Agency theory focuses upon relationships between parties where one delegates some decision-making authority to the other. The principal would delegate some decision making authority to the agent who, in turn, would be responsible for maximizing the principal's investment in exchange for an incentive, such as a fee.
In an agency relationship, the principal is the person who gives authority to another, called an agent, to act on his or her behalf.
The principal-agent relationship is an arrangement in which one entity legally appoints another to act on its behalf. In a principal-agent relationship, the agent acts on behalf of the principal and should not have a conflict of interest in carrying out the act.
The principal-agent problem is a conflict in priorities between a person or group and the representative authorized to act on their behalf. An agent may act in a way that is contrary to the best interests of the principal. The principal-agent problem is as varied as the possible roles of principal and agent.
DUTIES OF AGENT: -
- Duties to follow Instructions or Customs
- Duty of reasonable care and skill
- DUTY TO AVOID CONFLICT OF INTEREST
- Duty not to make secret profit
- Duty to remit sums
- Duty to maintain Accounts
- Duty not to delegate
The five types of agents include: general agent, special agent, subagent, agency coupled with an interest, and servant (or employee).