Agency Problem

Business, Legal & Accounting Glossary

Definition: Agency Problem


Agency Problem


Full Definition of Agency Problem


A conflict that exists in an organization between those who are in positions of control or trust (agents) and those whose interests are to be served (principals or stakeholders) in which actions taken by the agents instead serve their own interests. Such conflicts tend to arise more frequently in organizations that lack sufficient or effective material, moral and coercive incentives for agents to act otherwise. Also called principal-agent problem.


Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/agency-problem/
Modern Language Association (MLA):
Agency Problem. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
December 02, 2021 https://payrollheaven.com/define/agency-problem/.
Chicago Manual of Style (CMS):
Agency Problem. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/agency-problem/ (accessed: December 02, 2021).
American Psychological Association (APA):
Agency Problem. PayrollHeaven.com. Retrieved December 02, 2021
, from PayrollHeaven.com website: https://payrollheaven.com/define/agency-problem/

Definition Sources


Definitions for Agency Problem are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.