SOLUTION: KU Business Venture Agency Issues Question

View attached explanation and answer. Let me know if you have any questions.1Running Head: BUSINESSBusinessStudent NameInstitutionProfessorCourseBUSINESS21. An agency relationship is a relationship between the principal and agent. The “principal”being the person(s) / individual(s) seeking services from an “agent” (Huu Nguyen et al.,2020). If I am the only worker, and only my money is put in in its running, therewouldn’t be any form of agency struggles in such a scenario since there exist no otherinvolved parties. An agency conflict is well-defined as a wrangle amid the principal andagent. in such a case, an agent is not yet existent. I am the only involved party.2. Employing new staff may cause agency issues. In such a case, the staff acts as the agentswhereas, I function in a Principal’s role. This results in an agency relationship. On theoccasion where a conflict between the staff and me arises, that might generate an agencyconflict (Huu Nguyen et al., 2020).3. A number of agency tussles that might transpire in such a case include: a conflictbetween stakeholders and management team, conflict between creditors and shareholders,and conflicts amongst the creditors, managers, and stockholders (Huu Nguyen et al.,2020).4. Agency expenses revolving around the disbursement of extra dividends to existingstakeholders might possibly increase when fundraising from external creditors. This isdue to the shareholders disag…

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