Posted: May 21st, 2022

The Theory of the Firm attempts to explain how and why corporations exist. In its simplest form, corporations exist to maximize profits. As the economy grows increasingly complex, so have corporations.

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The Theory of the Firm attempts to explain how and why corporations exist. In its simplest form, corporations exist to maximize profits. As the economy grows increasingly complex, so have corporations.
How should the Theory of the Firm and Agency Costs impact our decision-making? Discuss agency problems with the help of some real-life examples (eg. Enron or Xerox Corporation).
Below are links to an article. It is a long article, 76 pages. The key to this reading is the first 12 pages, Pages 32 (starting at 2.6) to page 40, Page 45 (starting at 4.2) to 51, Page 60, and the last 2 pages (71 and 72). Read and reflect upon them. You may wish to do some research of your own. Make sure you support your statements.

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