in the best interests of the organization.
A more serious example of an agency problem in this context would be one in which a local unit manager curtailed essential long-term expenditures in search of short-term growth (Staughton, 1993). For any one or a combination of a variety of reasons, a local unit might not be achieving profitability targets in a particular reporting period. As a means of assuring that the profitability target are met, a local unit manager might decide to eliminate a significant proportion of the unit sales promotion expenditures during that reporting period. By taking such action, the short-term profitability goals of the unit may be met. On the other hand, however, the long-term market share goals, volume goals, and profitability goals of both the local unit and the organization as a whole might suffer, as a result of the curtailment of sales promotion expenditures.
As these two examples illustrate, the agency problem stemming decentralization and cons
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