Strategies To Resolve The Principal Agent Problem Accounting Essay

Strategies To Resolve The Principal Agent Problem Accounting Essay In general, the principal-agent problem refers to difficulties of motivating one party the agent to act for the best interest of the other party the principal. In a company, the owners of the assets (the stockholder) are the principals and the managers of the company are the agents. The stockholders of the company authorize the managers to manage and use their resources to make profit for the stockholders. (Kaskarelis, I. A. 2010) The cause of the principal-agent problem is that the information asymmetry between the principal and the agent and the principal and agent have different interests. (Ulrike, L., Arleta, M) Generally, the Agents are the managers of the resources and have more information than the principals. In a company, the managers of the company will have more information about the company than the stockholders of the company. The agents may use this asymmetric information to get interest for themselves rather than the principals. Figure 1, Basic Model of Principal-agent problem In general, the principal-agent problem is the problem that the agent is not doing the best for the principals. The so-called principal-agent problem is really caused by the interest conflicts between the two parties. As a principal, he or she wishes the agent to do the best for his or her interest. As an agent, he or she should do the best for the principal. However, without enough and appropriate motivations from the principal, the agent may not doing the best for the principals. If the agent is not acting for the interest of the principal, the moral hazard happens. This is the classical model of principal-agent problem. In order to motivate the agent to work for the best interest of the principal, incentives should be given. Strategies to resolve the principal-agent problem Make appropriate incentive structure The first strategy of solving the principal-agent problem can be from the incentive aspect of the agent. The cause of the principal-agent problem is the motivation given to the principals. Based on the experiment of principal-agent problem, high performance of the agents were observed if good compensations were given to the agents. (Ulrike Leopold-Wildburger, Arleta Mietek, 2010) Even though the relationship between the compensation and the performance is not linear, the outputs of the agents have positive relationship with the compensation of the agents. Yuliy Sannikov (2008) advocates that the dynamic incentives play very important role in the economic life. In a company, the wages of the managers and also the employees can affect the performance results of the company. Connecting the compensations of the agents to the performance will give incentives to the agents to do their best. In a company, the employees salaries can be connected to the performance results of the employees. The managers salaries can be linked to the performance of the company. In this situation, the managers of the company will have enough incentive to do their best. The stockholders of the company can also enjoy the better profits of the company. One alternative solution is to give the managers of the company certain amount of corporate stocks. The income of the managers are affected by the stock prices (Bruhl, R. H. (2003). The managers will have the incentive to do the best to increase the stock price of the company. In fact, many listed companies have the so called Equity Incentive Package (Bronstein, R. J. 1980). Pro and cons This strategy of solving the principal agent problem is the most basic one and the short-term effect can be seen immediately. Linking the agents compensation with the performance by giving the managers corporate stock is the most effective way to solving the principal agent problem. The potential drawback of this strategy is that giving the managers stock may result in the possibility of insider trading. Evaluate the performance of the agent continuously The second strategy of solving the principal-agent problem is to monitor the agents behavior and evaluate the performance of the agents. I will explain this in the case of a company. In a company, the managers as the agents and the stockholders of the company are the principals. The managers behaviors are monitored by the stockholders closely in order to make sure that they are doing the best for the interest of the stockholders. In the company, the evaluation of the performance of the company is also very important. When the evaluation of the performance plays a role in determining the compensation of the employees, that is to say there is still room for the employees to improve the performance (Carl Blumstein, 2010). with the monitoring of the companys performance, the managers of the company tend to perform better. Pro and cons Continuous evaluation of the performance in a company can motivate the managers continuously (Long, N., Sorger, G. 2010). Because of the continuous motivation, the performance of the company can keep improving. This is the biggest advantage of the strategy. However, the evaluation process of the managers is a time and money consuming task. The evaluation or monitoring of the agents may incur a lot of expenses. Regulate the agent with moral standards The principal-agent relationship is not only a kind of legal relationship between the principal and the agent. The principal agent problem is also a moral hazard problem (Randy, S. 2011). According to the basic business ethics, it is ethical for the agents to do the best to represent the interest of the principals. The first strategy of solution by building the appropriate incentive structure of the agents and the second strategy of monitoring the activities of the agents can get only short term results. In the long term, establishing the ethical awareness of representing the best interest of the stockholders can be a good choice. With a good ethical awareness, the principal and agent problem can be solved in the long term (Ruachhaus, R. W. 2009). In the case of Psychiatrists Relationships with Industry, the principal agent problems can be solved from both incentives and ethical view (Appelbaum, P. 2010). The doctors are the agents of the patients. The doctors with high moral standard will not recommend medicines of high cost to the patients unless is necessary. Pro and cons The moral standard improvement requires a long time and also needs the commitment of the employees. The moral issues in the principal agent problem can be seen clearly, but sometimes it is very difficult to distinguish. The potential advantage of this strategy is that it can achieve long term result in the company. Conclusion The principal agent problem comes from the asymmetric information between the principal and the agent and the principal and agent have different interests. The principal hires the agent to work for him and the agent works for the interest of the principal. Without enough motivations, principal agent problem appears. The principal agent problem is also a moral hazard problem. There are three alternative solutions to overcome the principal agent problem. One is to give incentives to the agent. The second is to evaluate and monitor the agents activity to make sure the agent works best. The last solution is depending on the moral standards. All these three solutions have different advantages and disadvantages.

Corruption in Malaysia

I have oral test with my group on next weak and I have found this text on internet? Composition of Forum Example Essay Title: Corruption Chairman of the Forum: greetings. The teachers and classmates. As of this morning we are thankful for another opportunity to discuss social problems which I think is more chronic in the absence of drastic measures taken to address them. Without delay time, let me introduce the panel members, which left me was his right split B and C are the relative Title of the forum this morning is â€Å"the problem of corruption inMalaysia. † Next, I call our first panel, the relative B provides definitions of corruption and its characteristics. Brother B: hi and thank you chairman. Web-based anti-corruption commission (MAC), corruption is an act that involves giving and receiving of money or specific goods with intent to prevent the action taken or receive privileges. Corrupt practices involving all levels of society whether in public or private sector. W hich kind of support will be in the form of material, such as money, cars and houses, and forms of entertainment such as women.Brother C: According to the Prime Minister, Dates Series Abdullah Madam Bawd described the corruption as a cancer and if left unchecked will cause a government collapse and thereby tarnish the image in the eyes of the international. Chairman: We have been clear on the issue of corruption. Now what are the opinions of our panel members about the causes of corruption? Brother B: My chairman. Let me put in a bit. The main cause is peer influence. When I saw my colleagues being corrupt and enjoy the luxuries of life without any action, a person would be tempted to accept bribes.Stress at work is able to interfere with feelings, especially if senior officers were also involved. Without thinking, one that will be easily affected and were corrupt because they want to quickly enjoy the luxury of living in this mortal world. Chairman: C Maybe you want to add an opini on on the cause of corruption? Brother C: Chairman, I agree with you B. In addition, the law in our country are causing many poor people are not afraid of the punishment imposed.For example, legal action is considered a light punishment to the culprits of corruption as impaired with the number of corruption are taken by them have given a negative outlook on the capabilities of our Judicial system to address this issue. In addition, the lighter sentence is said to be motivated to certain parties to take the risk of corruption because the recipient is aware that coffee money they are able to enjoy Chairman: Thank you C, I hope we can all work together to prevent corruption and do not embarkation rooted in the minds of the people of Malaysia. Moreover, the problem is more serious.What is his relation to B steps to overcome? Brother B: Government should Meghan attitude of civil servants and the private for more trust and responsibility. The slogan â€Å"Clean, Efficient and Trustworthy † introduced by former Prime Minister Tuna Dry. Empathic Mohammad should be embraced by all public and private sector. Service counters have been introduced in all government offices to avoid the practice of giving and receiving â€Å"coffee money. † Bureaucracy should also be reduced or eliminated to create more efficient and effective. This was never raised by the Honorable Prime Minister in his speech in Parliament recently.Chairman: Thank you B. It appears that you have something to C is pronounced. Please. Brother C: The government should enforce laws for the public aware of how dangerous and serious problem of corruption, if not eradicated, and are confined to national security. Penalties are more severe Jail terms provided in the Anti- Corruption Commission (MAC) 2009 Parliament passed the new recently slogan can be daunting. The court also suggested that the maximum punishment. More power to act against people who refuse to cooperate den the MAC also can change the attitude of the hemp that has refused to cooperate.Whistler's should be rewarded. They should also get protection from the authorities. Chairman: Thank you C, and I think we are at the end of the forum. In summary, I think the problem of corruption in our country is a serious problem and needs to be addressed immediately. Therefore, I urge all parties to helping the government address this problem. In addition, let me express my gratitude to the highest members of the panel. However, what could I do not allow us time to talk further. Thank you. Is there any wrong word or sentences in this essays? Please help me.. BTW I'm from Malaysia

Samarium Facts - Sm or Element 62

Samarium or Sm is a rare earth element or lanthanide with atomic number 62. Like other elements in the group, it is a shiny metal under ordinary conditions. Here is a collection of interesting samarium facts, including its uses and properties: Samarium Properties, History, and Uses Samarium was the first element to be named in honor of a person (an element eponym). It was discovered in 1879 by  French chemist Paul Émile Lecoq de Boisbaudran after he added  ammonium hydroxide to the preparation made from the mineral samarskite. Samarskite gets its name from its discoverer and the man who loaned Boisbaudran the mineral samples for his study -- Russian mining engineer  V.E. Samarsky-Bukjovets.Ingesting the right dose of samarium chloride will allow it to bind with alcohol and prevent you from getting intoxicated.Its unknown exactly how toxic samarium is. Its insoluble compounds are considered non-toxic, while the soluble salts may be mildly poisonous. There is some evidence samarium helps stimulate metabolism. It is not an essential element for human nutrition. When salts of samarium are ingested, only about 0.05% of the element is absorbed, while the rest is immediately excreted. Of the absorbed metal, about 45% goes to the liver and 45% is deposited on to bone surfaces. The remainder of the absorbed metal is eventually excreted. The samarium on bones remains in the body for around 10 years.Samarium is a yellowish silver-colored metal. It is the hardest and the most brittle of the rare earth elements. It tarnishes in air and will ignite in air  at about 150  °C.Under ordinary conditions, the metal has rhombohedral crystals. Heating changes the crystal structure to hexagonal close-packed (hcp). Further heating leads to a transition to a body-centered cubic (bcc) phase.Natural samarium consists of a mixture of 7 isotopes. Three  of these isotopes are unstable but have long half-lives. A total of 30 isotopes have been discovered or prepared, with atomic masses ranging from  131 to 160.There are numerous uses for this element. It is used to make  samarium-cobalt permanent magnets,  samarium X-ray lasers, glass that absorbs  infrared light, a catalyst for ethanol production, in the manufacture of carbon lights, and as part of a pain treatment regimen for bone cancer. Samarium may be used as an absorber in nuclear reactors. Nanocrystalline  BaFCl:Sm3 is a highly sensitive x-ray storage phosphor, which may have applications in dosimetry and medical imaging. Samarium hexaboride, SmB6, is a topological insulator that may find use in quantum computers. The samarium 3 ion may be useful to make warm-white light-emitting diodes, although low quantum efficiency is an issue.In 1979, Sony introduced the first portable cassette player, the Sony Walkman, made using samarium cobalt magnets.Samarium is never found free in nature. It occurs in minerals with other rare earths. Sources of the element include the  minerals monazite and bastnasite. It is also found in samarskite, orthite, cerite, fluorspar, and ytterbite. Samarium is recovered from monazite and bastnasite using ion exchange and solvent extraction. Electrolysis may be used to produce pure samarium metal from its molten chloride with sodium chloride.S amarium is the 40th most abundant element on Earth. The average concentration of samarium in the Earths crust is 6 parts per million and about 1 part per billion by weight in the solar system. The elements concentration in seawater varies, ranging from 0.5 to 0.8 parts per trillion. Samarium is not homogeneously distributed in soil. For example, sandy soil may have a samarium concentration 200 times higher at the surface as compared with deeper, damp layers. In clay soil, there may be over a thousand times more samarium at the surface than further down.The most common oxidation state of samarium is 3 (trivalent). Most samarium salts are pale yellow in color.An approximate cost of pure samarium is about $360 per 100 grams of metal. Samarium Atomic Data Element Name:  SamariumAtomic Number:  62Symbol:  SmAtomic Weight:  150.36Discovery:  Boisbaudran 1879 or Jean Charles Galissard de Marignac 1853 (both of France)Electron Configuration:  [Xe] 4f6  6s2Element Classification:  Rare earth (lanthanide series)Name Origin:  Named for the mineral samarskite.Density (g/cc):  7.520Melting Point ( °K):  1350Boiling Point ( °K):  2064Appearance:  Silvery metalAtomic Radius (pm):  181Atomic Volume (cc/mol):  19.9Covalent Radius (pm):  162Ionic Radius:  96.4 (3e)Specific Heat (20 °C J/g mol):  0.180Fusion Heat (kJ/mol):  8.9Evaporation Heat (kJ/mol):  165Debye Temperature ( °K):  166.00Pauling Negativity Number:  1.17First Ionizing Energy (kJ/mol):  540.1Oxidation States:  4, 3, 2, 1 (usually 3)Lattice Structure:  RhombohedralLattice Constant (Ã…):  9.000Uses:  Alloys, magnets in headphonesSource:  Monazite (phosphate), bastnesite References and Historical Papers Emsley, John (2001). Samarium. Natures Building Blocks: An A–Z Guide to the Elements. Oxford, England, UK: Oxford University Press. pp. 371–374. ISBN 0-19-850340-7.Weast, Robert (1984).  CRC, Handbook of Chemistry and Physics. Boca Raton, Florida: Chemical Rubber Company Publishing. pp.  E110.  ISBN 0-8493-0464-4.De Laeter, J. R.; Bà ¶hlke, J. K.; De Bià ¨vre, P.; et al. (2003). Atomic weights of the elements. Review 2000 (IUPAC Technical Report).  Pure and Applied Chemistry. IUPAC.  75  (6): 683–800.Boisbaudran, Lecoq de (1879).  Recherches sur le samarium, radical dune terre nouvelle extraite de la samarskite. Comptes rendus hebdomadaires des sà ©ances de lAcadà ©mie des sciences.  89: 212–214.

Essay on Nurture versus Nature - 756 Words

Nurture versus Nature The human brain is a portion of the central nervous system and serves as the control center for movement, sleep, hunger, and virtually everything else vital and necessary to survive. Not only that, but the brain also controls all human emotions from fear and love, to elation and sorrow. It also receives and interprets countless signals from other parts of the body and the outside environment. Summarily, the brain makes us conscious, emotional, and intelligent. Its no wonder that with everything going on in the brain, so much emphasis is placed on its development. We now know, from scientific research, that the brain grows at a rapid rate within the first years of an infants life. With this information in mind,†¦show more content†¦The structure of the brain is delicate, especially during the maturation years of development. If the brain is traumatized in any such way within the first years of childhood, those traumatic events will shape the brain as it would have they been jovial ones. These events change the structure of the brain in numerous ways. Though these changes are internal, they have a tremendous outcome on behavior as well. Trauma elevates stress hormones, such as cortisol, that wash over the tender brain like acid, as a result, regions in the cortex and in the limbic system are 20 to 30 percent smaller in abused children than in normal kids. (Begley, p.20) This 20 to 30 percent difference generates enough anxiety to induce spouts of stress hormones at the slightest thought or reminiscence of a previous traumatic situation. This kind of reaction often causes problems with attention, concentration, and impulsive behavior. The ability to learn can also be altered via early childhood trauma. It is from this trauma that neurotransmitters, that play a key role in telling growing neurons where to go and what to connect to (Begley, p.32), are matted and cause insufficiency in learning capabilities. Only in rare cases of extreme isolation is it possible to observe concretely separated two factors in the development of human personality which are always otherwise only analytically separated, the biogenic and theShow MoreRelatedNature Vs Nurture : Nature Versus Nurture1602 Words   |  7 Pagesshape their personality? The nature versus nurture debate serves as one of the most ancient issues ever. As of this day in the year 2016, we have come to understand and realize that both nature and nurture do actually play very distinct roles as far as human development. It is still unknown however, whether we are developed specifically due to nature or to nurture. In the novel Frankenstein, the theme of nature versus nurture is quite apparent. However, due to the nurture aspect in the novel, the creatureRead MoreNature Vs. Nurture : The Nature Versus Nurture1268 Words   |  6 PagesOne of the most popular debates among people is the idea of nature versus nurture. According to psychology. about.com: The nature versus nurture debate is one of the oldest philosophical issues within psychology†¦nature refers to all of the genes and hereditary factors that influence who we are – from our physical appearance to our personality characteristics [while] nurture refers to all the environmental variables that impact who we are, including our early childhood experiences, how we were raisedRead MoreNature Vs. Nurture : Nature Versus Nurture1678 Words   |  7 PagesNature Versus Nurture Personality development expands far past the environment. Environment contribute to most of the personality development when it comes to nature versus nurture. Nature versus nurture is a trait that is typically inherited in the human society. 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Nurture : Nature Versus Nurture Essay1939 Words   |  8 PagesNature versus Nurture You got your dark brown hair from your father and you got your looks from your mother, but where did you get your excitement for sports and your love for all animals? A person’s physical characteristics lean more towards genes and heredity, but our genes are not mentioned as much when behavior is the topic. This is how the nature versus nurture debate first began. Scientists who believe in the nature theory believe that people behave the way they do due to heredity and genesRead MoreNature Vs Nurture : Nature Versus Nurture1360 Words   |  6 PagesNature vs Nurture Nature versus nurture is a complicated subject to speak about. If one’s abilities or lack of are due to their environment or their genes. For example, a child is behaving negatively in class. Many individuals are quick to jump to the conclusion that â€Å"Oh, that kid’s parents don’t care, or just don’t know how to raise their child.† That could very well be a possibility, but most people never think that maybe they have a hereditary problem, such as ADHD, that was passedRead MoreNature Vs Nurture : Nature Versus Nurture2710 Words   |  11 PagesAbstract If someone inquires about nature versus nurture, this paper will give not one specific answer but a combination of both answers. Human personality is a combination of environment and a biological characteristic that controls precisely where the individual will end up in the developmental spectrum. The experiences that individuals will develop from throughout stages of development, their childhood and into their adulthood, play a great part in their conscious and unconscious motives. TheRead MoreNature versus Nurture1424 Words   |  6 Pageshelping raise Frank. A whole family of women stepped forward and took over handling the newborn whenever Maria desired. The striking difference between the childhoods of her two sons is reflected in the child development of theory of nature vs. nurture. Nature vs. Nurture suggests that certain behaviors of children are inborn, and occur naturally, genetically, or biologically while other behaviors are results of environmental influences and surroundings. In the Journal of Family Psychology, it hasRead MoreNature Vs. Nurture : The Debate Of Nature Versus Nurture895 Words   |  4 PagesNature vs. Nurture The debate of nature versus nurture has been an ongoing debate for a long time. When applying this argument to education there is no proven winner. The nature side of the coin believes that a person is born the way that they are. This could include intelligence level or personality traits such as being outgoing or shy. 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