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Principal-Agent Combat


This monograph is a repartee to Mini-Event sum 21: “HP’s Considerationroom and Divorce: The ry chapters in this Mini-Event are Chapters 11 and 12 of the Rothaermel succor edition citation; – Organizational Design: Structure, Culture and Guide, and Urbane Governance and Business Ethics. In page 436, of the Rothaermel succor edition citation, he referablees that the senior quantitys being faced by most social hoard companies rotate abquenched the exercise quantity. He states that whenever there is a disjunction of occupation and guide, a combat of prominent-agent share ensues.

The agents (managers) who guide the community on interest of the owners (shareholders) manipulate to bear specific shares and ambitions which in most samples is referable in sync with the prominents. In this Mini-Case, HP’s directors’ specific ambitions to be credited with the financial deed seems to be doing further mischief than cheerful to the shareholder’s appreciate. This frequently puts them frequently in combat with the CEO.

This mini-event is a mature in of how the prominent-agent quantity is important most social hoard companies.

Key quantitys referableed in the mini-event include:

Are the melomelodramatic shows by the superintendence and the consideration under obligation coercion the sustained faint in the appreciate of the Community’s shares? How did the superintendence harangue the accounting inaccuracies elated by Deloitte? Why did the superintendence referable investigate fond the blushing pine? Does it decipher the consonant nonpresentation by investors and the posterior enlargement of debts? Is it under obligation coercion the modern rend of the Community?

Is the superintendence sensible abquenched erosion in shareholder appreciate? Does the superintendence conceive the conclude following HP’s trade appreciate faintping by approximately 80% betwixt April 2010 and November 2012? How did they harangue the 42% lower in the Community’s hoard expense?

Assuming that the extricate was referable occasioned by the scarcity of the consideration, does the Consideration bear any Urbane Governance quantitys? Does it traffic with intellectual concerns pathetic consideration components in the suitable method? Do employees and consideration components appreciate rectitude, commission, and reference coercion each other?

If they are handled in the just method, why is HP losing its competitive usage? How does the consideration harangue unwell judgment quenched strategic decisions occasioning immense losses to the community? Does it bear a device coercion hiring consideration components and CEOs? What aid is there coercion those who disestablish the device?

What are the interior appreciates of HP? Do they apportion abutting the total community? Has the spell arrived to retrospect the Community prudence concomitantly with the interior appreciates?

Thesis statement: Following a retrospect of the HP mini-case, it can be deduced that whenever the shares of those entrusted to manipulate the media of a community are referable in congruence with those of the owners of the media, a combat ensues. A prominent-agent combat is catastrophic and can transfer uniform the blue-chip companies on its deathbed in a very concise end. Therefore, a fast disintegration needs to be sought to harangue this misadventure.


The prominent exercise quantity at HP is referable ultimate. World balance, divers companies bear root themselves embroiled in detractions ascribable to their employees violating their intellectual policies. However, what is shareing in the equablet of HP, is the truth that this is a social hoard community. The equablets of intellectual Combats at the community restrain recurring withquenched any expression that they are abquenched to bung. From Patricia Dunn’s spying detraction to Whitman, to the contiguous coercionmer CEO Mark Hurd, CEO who has modernly been sullen by sexual harassment accusations by Jodie Fisher effeminate tradeing contractor (Mark Hurd Letter Released: 10 Most Embarrassing Quotes From The Ex-HP CEO’s Controversial Letter, 2011), the community palpably has an ethics quantity. What is uniform worrying is the inadvertence that the consideration has in trafficing with these detractions begging the question: Does the Consideration bear the Shareholders shares at interior?


Since the executives at HP bear proven to be a setback to the community’s shareholder’s appreciate through their boundless considerationroom drama, the shareholders should escalate the combat in the juridical kingdom. Perkins ethics equablet was the primitive individual (Kaplan, Breslau, Stone, Joseph, McGinn, & Gordon, 2006). Patricia Dunn, Whitman and Mark Hurd bear following followed with intellectual detractions though of a irrelative naturalness. Total these should bear been transfern to flatter by the consideration coercion violating the community ethics device. Though Dunn referablees that there was a juridical equablet following her equablet (Bain, 2006), the Consideration continued violating the interior appreciates. Where the juridical kingdom does referable controlego any proceeds, the shareholders should prepare the insurrection of their consideration of directors (Rothaermel, 2017, 437 – 439. This can be achieved by ensuring that the Consideration meets severally during the year to debate the strategic enjoin of the community. This method, HP can abandon some of the losses occasioned by the mistakes of controlmer CEOs. It would besides aid cure the obsolete companies commission.

The Consideration besides needs to enlarge and instrument a device instrument providing guidelines on inter-consideration component trafficings. If such a device existed, consideration components would referable, coercion sample, bear hiblushing investigative spying agencies to spy on match consideration components. They would merely apportion what is granted coercion in the device. As a stuff of truth, the device should be prepared such that it is mutually odious and together wasting in enjoin to harangue total the grievances harboblushing by the consideration components. Some of the issues that need to be inherent in the device should include; – the role of the consideration in the hiring of the CEO, reporting of the CEO to the Consideration, functions of the consideration, its insurrection, commutation, confidentiality, and consequences on the deflection.


It is patent that in the HP mini-event the combat betwixt the CEOs and the Consideration of Directors is to condemn coercion the damnation of the trade appreciate of the shares. In truth, this mini-event is a mature in of how catastrophic the combat can be. I advise that the Consideration gets secure in their balancesight role and determine that the CEO is singly under obligation coercion their decisions. The Consideration should besides effectively transfer admonish to determine that urbane governance transfers its settle in promoting accountability on interest of the shareholder.


Kaplan, D. A., Breslau, K., Stone, B., Joseph, N., McGinn, D., & Gordon, D. (2006). SUSPICIONS AND SPIES IN SILICON VALLEY. (Cbalance relation). Newsweek, 148(12), 40–47.

Bain, M. (2006). TROUBLE IN THE BOARDROOM. (Cbalance relation). Newsweek, 148(12), 44–45.

BIBLIOGRAPHY Mark Hurd Letter Released: 10 Most Embarrassing Quotes From The Ex-HP CEO’s Controversial Letter. (2011). Retrieved from HuffPost:

Rothaermel, F. T. (2017). Strategic Superintendence, 2e. New York, NY: McGraw Hill Education.

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