Professional Documents
Culture Documents
Tenth Edition
Chapter 1
Goals and Governance of the Firm
Instructor: Sanam Taimoor Institute of Business Management
Topics
What is Financial Management Finance and You How are companies organized Goals of Corporations Business Ethics and Social Responsibility Agency Relationship
Investments
Brokerage Houses Main function in investments:
Sales Analysis of individual securities Determining optimal mix of securities
Financial Management
Chapter 1 Brigham & Ehrhardt 10 ed 4
Forms of Organizations
Sole Proprietorship Partnership Corporations
CEO
Treasurer
Controller
Credit Manger
Inventory Manager
Cost Accountant
Financial Accountant
Tax Accountant
Social Responsibility
Only shareholders interests or welfare of employees and society as well?
Chapter 1 Brigham & Ehrhardt 10 ed 9
Agency Relationship
Agency relationship arises when a principle hires an agent to perform duties on behalf of the principle Within financial management primary agency relationships are
Between stockholders and managers Between stockholders and creditors
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Agency Conflict
Occurs when agents behave in their own interests rather then those of the principles Ways to avoid agency conflicts
Managerial Compensation Direct intervention by shareholders Threat of firing Threat of takeover
Chapter 1 Brigham & Ehrhardt 10 ed 11