Answer to Question #143862 in Economics for Ahmed

Question

The shareholder of Al-Karam wants to maximize his profits by selling his goods in the larger quantities. In order to achieve his target (s) he hired a manager to look after his business. However, the manager instead of maximizing business profits started maximizing his own interest by selling the designs in black to the competitor’s designers. Analyze the above situation and explain the possible problem that might occur for Al-Karam.

Answer 1

Unfortunately, the shareholder Al-Karam made the wrong decision to transfer his powers to the hired manager. The consequences for Al-Karam can be of two types: financial and legal. Financial consequences - decrease in the company's profits. Legal consequences - despite the fact that some developments are being carried out at his enterprise, an unscrupulous manager can sell them before registering intellectual property rights by the Al-Karama enterprise, after which, when unsuspecting employees of the company come to register intellectual property rights for their own development, they can be accused of plagiarism.