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1) The separation of ownership and control is frequently a subject of concern for financial managers. Management decisions are sometimes not acceptable to shareholders. This, in turn, increases conflicts. These conflicts are termed agency problems.

2) Give at least two more illustrations of agency problems. Why does such a conflict develop? Are such conflicts more probable to occur in smaller or larger organizations? Why? What can be done to reduce the likelihood of such conflicts?

Comment on the postings of at least two peers and point out whether you agree or disagree with their views.

Management Theories, Management Studies

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