CHAPTER 4

Ethics and Agency Theory in Management

Unsal Sigri

Baskent University, Ankara, Turkey

Umit Ercan

Turkish Military Academy, Defense Science Institute, Ankara, Turkey

Introduction

The use of agency theory remains highly controversial among business ethicists. While some regard it as an essential tool for analyzing and understanding the recent spate of corporate ethics scandals, others argue that these scandals might not even have occurred had it not been for the widespread teaching of agency theory in business schools. (Heath 2009)

This chapter focuses on agency theory or principal–agent problem, a topic that is widely discussed in economics and management, and becoming a concern in business ethics today. Organizational theories concern ...

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