Agency Theory And Stewardship Theory Case Study

Agency Theory & Stewardship Theory In the business world today, corporations must seek ways to achieve their goals and objectives by conducting several strategies to grow their business successfully. Corporate governance is a vital component for organizations to implement this element into their business operations, cultures, board directors, investors, employees, and other parties. Each firm has unique methods to implement their business activities as well as daily operations to meet demands from customers, and investors. Thus, many firms may elect to implement agency theory, or stewardship theory, which may be appropriate to their strategic planning. Wheelen, Hungen, Hoffman, & Bamford (2015) define agency theory as the business problems …show more content…
al, 2015). These important responsibilities allow top management to communicate to vendors, customers, and the community effectively. Moreover, leaders are capable to establish an important relationship with their strategic business effectively in short-term and long-term relationships. Equally, managing obligations to stakeholders is the most important task that the top management must comply in order to meet their financial and legal responsibilities (Wheelen, et. al, 2015). Wheelen, et. al, (2015) empathize that there are four important phases of strategic management. These phases are basic financial planning, forecast-based planning, externally oriented planning, and strategic management (Wheelen, et. al, 2015). The benefits of strategic management include financial management, controlling external threats such as competitors’ strengths and weaknesses, and employee productivity (Wheelen, et.al, 2015). These benefits allow leaderships make any business adjustment to adapt new methods in order to be competitive in the business