This usually rises a so called "agent problem" (Dyckman, Intermediate
Accounting). Managers are in control of the property stockholders. However, the
interests of these two groups may not be the same. As manager is looking for
more power and prestige, they can tend to less profitable operations. Also
corporate officials may vote for high salaries and bonuses for themselves,
decreasing the dividends of stockholders by that.
There is no particular solution for all of these issues. There is only
hope that ethical standards and social responsibilities would guide every
manager throughout his/her career. "Professional conduct should be governed by a
code of ethics that reflects positively on the practitioner and managerial
profession. Simply stated, nothing should prevent a manager from maintaining
high ethical standards and social responsibility in the quest for high
performance and quality."
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