Emerson

Emerson does not want the Taiwanese vendor to take care of the assembly of the subpacks because the NT -US exchange rate is becoming low , the Taiwanese vendor could offer Emerson some incentives so that they would continue with them . Also , if Emerson does not want the quality of service the Taiwanese provides , they could offer low costs and other incentives that may favor Emerson . They could also use the market for corporate control since Emerson is not satisfied with the quality the Taiwanese vendor is providing . They could purchase the firm

to improve its quality that will also improve the quality of fan subpacks since they are the one assembling the Emerson fan subpacks . If Emerson is not satisfied with the performance of its stockholder , they could make the move to improve their performance that will , eventually also improve Emerson 's performance

Agency Relationship

An agency relationship is the relationship between a principal and an agent . The principals are the firm 's owners or shareholders while the agents serve as the managers and decision makers in the company . An agency relationship is established when the principal hires and compensates agents to take over the strategic decision making in the company . Although this might seem to be a good way in making certain decisions in the company , it also has its flaws . The principal and the agent might not have the same interests and goals for the company Agents may also decide on something that is in conflict with the goal of the principals . Also , since not all the principals can monitor their agents , one cannot be sure that the agents are doing their job properly Lastly , the agent might , consciously or unconsciously , practice managerial opportunism ADDIN EN .CITE Michael A Hitt2004116 Michael A . Hitt R . Duane Ireland , Robert E...