Owners v Managers and the Principle Agent Problem

Simon Evans writing in the Independent asks if we are seeing an age of greater shareholder activism against the entrenched power of executives at the helm of listed companies? A useful article for A2 students keen to have some examples of shareholders putting more pressure on managers but the limitations of scrutiny that lies at the heart of the principle-agent-problem.

”Owners vs managers

Target Corporation: New York-listed Target is under pressure from Pershing Square Capital Management after a decline in profit. Target is cutting costs by freezing the salaries of senior managers and taking on rival Wal-Mart by expanding its food sales. Pershing, with an 8 per cent stake, wants more substantial moves, such as replacing the board of directors.”

The rest of the article is here

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Unit 1 Micro: Can the UK Computer Games Industry Grow [24 Jan 2012]
Unit 4 Macro: Competitive Advantage in Trade (Some Videos) [12 Jan 2012]
Unit 2 Macro: Factors Driving Business Investment [10 Jan 2012]
Unit 1 Micro: Video Clips on Negative Production Externalities [29 Dec 2011]
2012 - Carnage on the High Street [28 Dec 2011]
Unit 3 Micro: Sub Normal Profits - BP Leaves the Solar Industry [21 Dec 2011]
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Unit 3 Micro: Patent Wars- A Touchy Subject for Apple [16 Dec 2011]
Unit 3 Micro: Brand Loyalty in Mobile Phones [27 Nov 2011]
Unit 2 Macro: Should the EU introduce a Tobin Tax? [14 Nov 2011]
AS Macro: The State of British Business [13 Nov 2011]
Unit 3 Micro: Unilever hit by rising costs [6 Nov 2011]
Unit 3 Micro: Impulses to Change Management Models [5 Nov 2011]
Unit 1 Micro: Costs and Benefits of a Super Sewer for London [1 Nov 2011]
Unit 3 Micro: UK Executive Pay - All in it Together? [29 Oct 2011]
Unit 1 Micro: Is the Sun Dipping on Solar Subsidies? [27 Oct 2011]
Unit 3 Micro: Ofcom gives stamp of approval for flexible pricing in mail [21 Oct 2011]
Unit 3 Micro: Tesco Behaving Badly - Price Anchoring [17 Oct 2011]
Unit 4 Macro: Unit Labour Costs and Inflation [12 Oct 2011]
Unit 1 Micro: Exercise on Market Supply [26 Sep 2011]
Unit 4 Macro: Greek Economy at Default’s Door [25 Sep 2011]
Unit 4 Macro: Bangladesh and Comparative Advantage in Textiles [19 Sep 2011]
Unit 3 Micro: Fixed and Variable Costs [18 Sep 2011]
Another Economics prop - for remembering MC=MR! [15 Sep 2011]
Unit 3 Micro: Short Run Costs of Production [6 Sep 2011]
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Starter Activity: Health Economics [1 Sep 2011]
Unit 3 Micro: Quiz on Business Costs and Profits [25 Aug 2011]
Unit 1 Micro: Cotton Prices and the Retail Price of Clothing [13 Jul 2011]
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Unit 4 Macro: Dangers of High Inflation [11 Jul 2011]
Unit 3 Micro: Oligopsony - Dairy Losses Drive Farmers from the Fields [10 Jul 2011]
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AS Macro Key Term: Demand Pull Inflation [24 May 2011]
AS Macro Key Term: Cost Push Inflation [24 May 2011]
AS Macro Key Term: Inflation [24 May 2011]
AS Macro Key Term: Recession [23 May 2011]
AS Macro Key Term: Spare Capacity [23 May 2011]
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A2 Micro: Oligopoly and Collusion [20 May 2011]
A2 Micro: Oligopoly [20 May 2011]
A2 Micro: Price Discrimination [19 May 2011]
A2 Micro: Entry Barriers in Markets [19 May 2011]
A2 Micro:  Monopsony Power in Markets [19 May 2011]
A2 Micro: The Importance of Profit [19 May 2011]
A2 Micro: High and Low Marginal Cost Products [19 May 2011]
A2 Micro: Consequences of Price Discrimination [19 May 2011]
A2 Micro: Examples of Price Discrimination [19 May 2011]
A2 Micro: Perfect Competition [19 May 2011]
A2 Micro: Competition and Efficiency [19 May 2011]
A2 Micro: Outsourcing [18 May 2011]
A2 Micro: Business Growth [18 May 2011]
A2 Micro: Innovation and Economic Policies [18 May 2011]
A2 Micro: Innovation Efficiency and Welfare [18 May 2011]
A2 Micro: Ownership and Control in Modern Businesses [18 May 2011]
A2 Micro: Moving Away from Profit Max [18 May 2011]
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A2 Micro: Minimum Efficient Scale [18 May 2011]
A2 Micro: External Economies of Scale [18 May 2011]
A2 Micro: Economies of Scope [18 May 2011]
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AS Micro Revision: Banana Prices [1 Apr 2011]
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AS Macro Revision: Investment Spending [12 Mar 2011]
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