ICTMBE 2013 2nd International Conference on Technology Management , Business and Entrepreneurship Mahkota Hotel Melaka Malaysia 5th December 2013 ISSBN 978-967-0468-56-3 2013 258 An Assessment of Agency Theory in the Context of Higher Education Institutions Abd Rahman Ahmad 1*, Mohd Nazir Mohd Adi, Haris Md Noor, Ng Kim Soon & Anim Zalina Azizan Faculty of Technology Management, Business and Entrepreneurship, Universiti Tun Hussein Onn Malaysia, 86400 Parit Raja Batu Pahat,Johor , Malaysia +6074533952 arahman@uthm.edu.my Abstract The rationale of this concept paper is to describe the application of Agency Theory in higher education institutions. The theory focused on the relationship between the principal and agent. Within the relationship, the most important problems that arise are informational asymmetries and goal conflicts. This is due to the incomplete information and different behaviour in the actions by the agents. Agency Theory needs to be further explore and testing to create valuable tool for research study especially in the context of higher education institutions. Within this perspective, research and the structure of this theory is applicable as a conceptual framework for the study related to the relationship between government and public funded universities. Keywords: Agency Theory, higher education institutions, goal conflicts, informational asymmetries