Essay Example | Topics and Well Written Essays - 500 words - 164

Essay Example This happens as a result that the managers tend to be motivated by their own self-interest and their interests differ most with the stakeholder’s interest. In this case the stakeholders are the principal while the managers are the agents. This problem is referred to as principal-agent problem. I agree with this claim because managers use the power and authority allocated to them by the shareholders for their own personal benefits. This problem is very difficult to deal with in most cases. However, the cost of dealing with this problem is far much expensive that the shareholders may end up losing a lot of money in the effort to ensure that they deal with the problem and eradicate it completely. Trying to do away with this conflict may outweigh the results of the managers. Therefore, the principal who are the shareholders opt to use several mechanisms to reduce this problem through several mechanisms which ensure that the results of the managers who are the agents in this case are not outweighed. In a company, shareholders expect the managers to maximize their wealth by making good decisions in the interest of the shareholder. However, the managers work hard and make decisions that that will best suit them and maximize their own personal wealth. There are several mechanisms that can be of good use to solve this conflict. One of the mechanisms used to solve this principal-agent problem is through the use of incentives types of compensation based on performance of the managers. This motivates the managers to work hard and make decisions that lead to maximization of the shareholder’s wealth. This mechanism ensures that the managers understand the risk of undertaking any costly actions which may lead to losses. The second mechanism of solving this problem is the threat of firing of the managers if they do not perform in the best interest of the shareholders. This mechanism helps in shaping the Essay Example | Topics and Well Written Essays - 250 words - 38 Essay Example

You may pick one to use Research Paper Example | Topics and Well Written Essays - 500 words

You may pick one to use - Research Paper Example The financial position of the organization will dictate whether it is capable of handling the implementation of the given project or if not. It may also find sponsors to grant finances towards the project. Technical feasibility is defined by the organizations ability to hire proper technology and experienced human labor for the development process. The analysis phase of the project helps establish the reasons as to why a new system is needed. It involves specifying what kind of system is to be built. This can be done by identifying the problems facing the organization and then coming up with a system to solve them. (Stuart , 1994). An example is a school that has observed increased demand for its library services from its students. The school may decide to create an online system which will ease the congestion at the library and consequently reduce the librarian’s workload. It may decide to put up an online virtual library where students can read soft copy library materials, reserve library books to borrow later and also extend the loan period of a book. The design phase helps determine how the system is to be built and what technology will be used. For an online system, server technology is employed; this will enable users’ access through a network. A database will also come in handy to save user records and the materials they can access online. For a virtual online library, the database may store the library users’ login and usage information. In addition softcopy materials such as pdf books and magazines can be downloaded from it. System modeling is also done during design. A system model helps the designer visualize the system in a simplified manner. It acts as a template of the system and helps to bring out the specifications of the system. The model will be used to ensure all the sub-systems are interconnected in a logical