GUIDEPOST: The Theory of Agency Redux

Academy of Management Discoveries GUIDEPOST: The Theory of Agency Redux Journal: Academy of Management Discoveries Manuscript ID AMD-2019-0136 Manuscript Type: Guidepost (By Invitation Only) Agency theory < Organizational & Management Theory, Institutional Keywords: Theory < Organizational & Management Theory, Organizational Design < Strategy Implementation, Norms < Interpersonal & Team Processes The theory of agency has found applications across the social sciences as well as in management fields; there are literally thousands of papers that employ it. Unlike many popular theoretical approaches in social science, however, the theory of agency has no standard citation. Most applications to date have employed variations on the economic theory of agency, with the most cited article being Jensen & Meckling (1976). Most literature using agency has featured the assumptions, terms, logics, and domain common to approaches in economics. Agency theory did in fact have a distinct origin: It was first proposed, independently, by Mitnick (1973, 1974, 1975), beginning the institutional stream, and Ross (1973, 1974), for the economics stream. Revisionist Abstract: work on agency theory has taken for granted that the task involves extensions and repairs in the economic theory of agency. This Guidepost argues that many of the criticisms do not necessarily apply to institutional agency theory. Work should return to an institutional approach that focuses on incentive relations rather than incentives, relationships of control such as authority and responsibility not just decisions, attention to how the inevitable imperfections of agency are managed not just how they are corrected, the exploration of complex motivation including terminal values, the influences of social norms on agency, and the design and functioning of systems of assurance that permit imperfect institutions to remain credible. Page 1 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Academy of Management Discoveries THE THEORY OF AGENCY REDUX BARRY M. MITNICK University of Pittsburgh Katz Graduate School of Business 261 Mervis Hall 3950 Roberto Clemente Drive Pittsburgh, PA 15260 USA Tel.: 412-648-1555 email: [email protected] Acknowledgment: I would like to thank Peter Bamberger and Paul Ingram for their very helpful comments and suggestions. Academy of Management Discoveries 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Page 2 of 21 2 THE THEORY OF AGENCY REDUX Abstract The theory of agency has found applications across the social sciences as well as in management fields; there are literally thousands of papers that employ it. Unlike many popular theoretical approaches in social science, however, the theory of agency has no standard citation. Most applications to date have employed variations on the economic theory of agency, with the most cited article being Jensen & Meckling (1976). Most literature using agency has featured the assumptions, terms, logics, and domain common to approaches in economics. But agency theory did in fact have a distinct origin: It was first proposed, independently, by Mitnick (1973, 1974, 1975), beginning the institutional stream, and by Ross (1973, 1974), for the economics stream. Revisionist work on agency theory has taken for granted that the task involves extensions and repairs in the economic theory of agency. This Guidepost essay argues that many of the criticisms do not necessarily apply to institutional agency theory. Work should return to an institutional approach that focuses on incentive relations rather than incentives, relationships of control such as authority and responsibility not just decisions, attention to how the inevitable imperfections of agency are managed not just how they are corrected, the exploration of complex motivation including terminal values, the influences of social norms on agency, and the design and functioning of systems of assurance that permit imperfect institutions to remain credible. Keywords: agency theory, institutional theory, social norms, organization design Page 3 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Academy of Management Discoveries 3 THE THEORY OF AGENCY REDUX The theory of agency has spread across the social sciences. It has had so many applications -- thousands -- that many articles omit citations to any originating source (e.g., Enos & Hersh, 2015); it has become part of the common language of social science. Moreover, unlike many approaches in social science, the theory of agency has no standard origin citation. The correct citation should be Mitnick (1973, 1974, 1975b), who introduced the institutional stream of work on agency, and Ross (1973, 1974), who first clearly proposed development of an economic theory of agency. But confusion over the origin of agency theory -- and its assumptions, terms, logic, and domain -- is common. Though the most influential work in the area, Jensen and Meckling (1976), is sometimes given origin credit, some scholars cite Berle and Means (1932) and even Adam Smith (1776) (see Dalton et al., 2007). [1] As a result of the confusion, several streams of work on "agency theory" strongly influenced by work in economics on information economics, incentive contracting, and the theory of the firm have dominated. We argue in this Guidepost essay that the dominance of approaches from economics has severely limited what was always the promise of agency theory - to give us a way to explain the myriad societal cases in which one party is acting for another. AGENCY AS RISK, INCENTIVES, AND A NORMATIVE THEORY OF THE FIRM The theory of agency abstracts and generalizes the relationship between an agent and a principal. Relationships of agency are ubiquitous as formal roles in organizations and society in general, as well as in such informal behaviors as altruism and helping relationships. Work on agency finds similarities in such apparently diverse contexts as employee-manager, lawyerclient, and director-shareholder relationships, and even in caretaker-patient relationships in hospices in which the patient is unable to express his or her preferences (see Shapiro, 2016). Academy of Management Discoveries 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Page 4 of 21 4 An important influence on agency theory came from information economics, including the effects of differing risk preferences and information. Arrow (1985) distinguished agency problems of moral hazard, when the agent is rewarded whether or not s/he takes care of the principal's interest, and of adverse selection, when the principal, who acquired an agent because of some disability regarding his or her own performance of the task, cannot determine whether the agent is acting optimally on behalf of the principal. While such problems are endemic and often critically important, the theory alone tells us little about behavior outside the decision. Agency in economics has also been seen, simply, as a formal theory of incentives (e.g., Gibbons, 1998, 2005). Berthold (1971) focused on the problem from the "sharecropping" literature on setting an optimal compensation sharing scheme between two actors. Ross (1973), created a model -- represented as the "principal's problem" -- for optimal incentive compensation between principal and agent, under certain conditions. Again, however, there is little in the model that relates to descriptive or behavioral characters of humans or organizations or contexts. Jensen and Meckling (1976) created an economic agency model of the firm. Selfinterested agents serve under metaphorical contracts (the firm is a "nexus" of contracts); shareholders as principals are assumed primary. Agency costs exist for monitoring agents, for bonding agents to the agency, and a residual loss when the principal is not perfectly served. Jensen and Meckling (1976) is a normative model of the firm that is also a poor description of corporate governance -- while the assumption of shareholder primacy creates a powerful model, it is completely at odds with the law regarding corporate control in the U.S. (see, e.g., Stout, 2012; Lan & Heracleous, 2010), and far too simplistic. Thus, we have a literature that has featured persistent confusion in treating agency theory as a particular theory of the firm, as an economic theory of incentives, and/or as an approach to modeling risk. Page 5 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Academy of Management Discoveries 5 As agency theory migrated into the management literature, it remained strongly influenced by these streams of work on economic agency, including its limiting terms and logics. Eisenhardt's (1989) widely-cited review article presents agency theory as “broadened” from the risk sharing literature in economics, but it remained largely an economic theory. [2] The criticism, when it came, held this agency model and its assumptions to be inaccurate representations of managerial motivation, under-socialized and not reflective of the societal and normative settings in which organizations operate, poorly descriptive of behavior in as well as of the legal status of the firm, and suggestive of undesirable and ineffective managerial policy. [3] A stream of revisionist work followed. Agency was a theory about economizing and risk and control whose assumptions needed relaxation and whose variables needed extensions. Thus, critics introduced "behavioral" factors, while still focusing on risk-taking in economic agency (Wiseman & Gomez-Mejia, 1998), and made claims, incorrectly, that agency theory had been limited to self-interest and so was innovatively going to be expanded to consider mixed motives, i.e., both self- and other-interests (Wiseman et al., 2012; Cuevas-Rodriguez et al., 2012; Martin et al., 2016). More realistic agents now acted with "bounded self-interest" affected by norms of reciprocity and fairness (Bosse & Phillips, 2016; Bosse et al., 2009); and attention was drawn to the role of other social norms (Casadesus-Masanell & Spulber, 2005; Lubatkin, 2005; Lubatkin et al., 2007). [4] Such work extended economic agency theory, but the institutional theory of agency began in 1973 with few such limitations. AGENCY REDUX AS THE MANAGEMENT OF IMPERFECTION So, what is – or should be -- the theory of agency and its contributions? The theory of agency is not a theory of the firm and is not tied to the context of corporate governance. It originated as a sociological theory of relational acting for others and is multi-level. [5] Academy of Management Discoveries 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Page 6 of 21 6 The economic theory of agency framed agency as an incentives-dominated theory of correction -- of how compensation systems and monitoring systems bend behavior back towards perfection, from the principal's perspective. But if agency, despite the corrective mechanisms, is in general not perfect, we are asking the wrong question: Rather, we need to know how systems are structured to be successful even when they are not perfect. It turns out that imperfect agency can even be highly functional -- indeed, essential -- in organizations, because organizations themselves may be viewed as solutions -- as social means created to tell agents what to do. The core logic of agency theory -- that makes it interesting as a social theory -- as introduced by Mitnick (1973, 1974, 1975b) is that it often does not pay the principal to invest in perfection; the net gains are so often not worth the costs (cf. Alchian, 1965). So both principals and institutions are constrained -- and designed -- to devise means to manage imperfect agency. It is all about managing, and managing around, imperfection. As a result, agency is fundamentally a theory of the management of imperfection.[6] Consider how the economic theory of agency and the institutional theory of agency would treat the problem of hiring new employees for the firm. The risk-based approach of economic agency would focus on the problem of adverse selection – that the applicant would be incentivized to conceal his or her true fitness for the position, with firm managers potentially unable to discern the agent’s true quality; after all, a reason they may need the agent is that they lack the skills the agent brings, so cannot evaluate the quality of those skills. But the institutional approach would argue that it is often not desirable to invest in searching for and purchasing the most perfect agent. The organization exists to provide economical instruction to originally imperfect agents, thereby permitting continual adjustment to meet changing technological and market demands.[7] Page 7 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Academy of Management Discoveries 7 So if the theory of agency is not necessarily a normative theory of the firm, did not originate solely in economics with its common limiting assumptions, and does not necessarily suffer from the criticisms levied at its most common applications, where does that leave us, moving forward? We therefore see the potential of a theory of agency redux that is: • Not a theory of incentives, but of incentive relations. Agency is a relationship, not a decision setting or calculus regarding contingent rewards. Figure 1 from Mitnick and Backoff (1984) reproduces a generalized sorting of the motivational structure of an incentive relation [8]. Contrary to the recent literature that has claimed novelty in broadening motivation beyond selfinterest (e.g., Wiseman et al., 2012; Bosse & Phillips, 2016), this 35-year-old article on the incentive relation in agency makes no assumption of self-interest. [9] We can study incentive relations by mapping them, comparing across organizational levels, boundaries, types, societal embeddedness, communication variations in incentive message sending and receipt, and so on. • Not a theory solely of decisions and the costs of control, but of the relationships of control. Figure 2 reproduces a sorting of authority relationships and operative norms from the original papers on the theory of agency (Mitnick, 1973, 1974, 1976a). Though this sorting is far from an exhaustive treatment of alternative relationships in agency, it illustrates what was already part of institutional agency over 45 years ago. In economic agency, we ignore organizational relationships such as authority and responsibility, focusing on simple decision points and assignment of the rights to make decisions. The older literature studied patterns of authority (e.g., Eckstein & Gurr, 1975), and we suggest that the comparative empirical study of authority patterns and of responsibility systems in and among organizations might be productive. • Not a theory of the means by which perfection can be approached most efficiently, but a theory of how inevitable imperfection can be managed most practically and effectively. Why is agency Academy of Management Discoveries 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Page 8 of 21 8 the means by which particular social action questions are addressed, especially given the persistence of imperfection? [10] How does the optimal level of agent perfection vary by setting under delegation? Is there a Goldilocks solution -- an optimal level of imperfection -- and, if so, how does it vary across institutional settings? [11] Empirical work can explore such questions as, how imperfect can organizations be, and in what respects, yet still perform satisfactorily? What mechanisms are in place in diverse organizational settings that serve parallel functions of managing imperfection? What happens when the management of imperfection fails? • Not a theory of limited motivational capacity, emphasizing self-interest and opportunism, but a theory of complex and often relational motivation including the obligations of action for another. Moreover, the terminal motivations barred from the black box of utility maximization in economics need to be resuscitated -- we need to jettison 70-year-old assumptions about modeling human motivation that have dominated economics. People are not black boxes. The assumption of utility maximization remains useful but is not necessary in all theories once we can measure terminal values, as some work has suggested (see, e.g., Reiss & Havercamp, 1998; Schwartz, 2012). We can incorporate complex human motivation into agency theory (cf. the elements of the focal receiver system depicted in Figure 1; see also Mitnick, 1973, 1974, 1975a, b; 1976a, b; 1992). Using Reiss's validated instrument, can we explore experimentally how differing terminal values affect agency behavior in the same or differing agency roles? • Not a theory of isolated decisions and of who gets to make them, but a theory of relationships embedded in social structures featuring social norms that shape them and are shaped in turn. For example, the original work on institutional agency identified the fiduciary norm, socialized and exhibited in situations of high dependency of principals on agents (Mitnick, 1973, 1975a, b; 1976a; Stinchcombe, 1986[1975]; Shapiro, 1987, 2005). The fiduciary norm can generate high Page 9 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Academy of Management Discoveries 9 levels of service. Would experimental studies show service quality increasing with dependency? What conditions moderate/mediate such agency? Could such work help design highly-reliable organizations? The other norms of agency also deserve systematic comparative empirical attention. [12] • Not an assumption of rational decision making under risk, rationally assured via optimal contracts and incentives, but of a theory of assurances that statements regarding events and conditions in the past, present, and future in the social world are credible representations of those events and conditions. If we accept that agency theory is all about the management of imperfection, we reach a troubling question: How is society able to sustain belief in a system that admittedly does not work the way it is supposed to? How do we come to accept -- indeed, trust in and place reliance upon statements about pervasively imperfect systems as credible -- as reliable and true? Via experimental work using the theory of testaments (see, e.g., Mitnick, 1999, 2000; 2009), can we, for example, determine how reports of past conditions or events are used preferably to claims about the present, or predictions about the future, to enhance credibility? The theory of agency has the potential to be what it was at its start, not what it has become -- a narrow caricature, the agency theory of the firm. Despite the value of the economic theory of agency, the theory of agency is not, and need not, be solely a theory of risk or incentives management. Its core logic is the difficulty -- sometimes the irrationality and sometimes the impossibility -- of creating and managing social organization populated with perfect agents. Hence, the theory of agency is in fundamental ways a theory of the management of imperfection in the pervasive societal contexts in which one party is acting on behalf of another. Academy of Management Discoveries 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Page 10 of 21 10 NOTES 1. But Jensen and Meckling (1976) never claimed its origin, citing earlier works (see their footnote 7). Spence and Zeckhauser (1971), an important work on the effects of differing risk, and Alchian and Demsetz (1972), who proposed a model of the firm based on a "monitor" (e.g., a manager) of team production who retains the residual benefit from the monitoring, are sometimes credited, although neither actually proposed the creation of a general theory of agency nor began explicit work on such a theory. And Berhold (1971), despite its use of now-familiar terms, was primarily a work in the incentive contracting/sharecropping literature. Though noting that his approach might apply in other situations of incentive contracting, Berhold neither proposed a general theory of agency nor actually dealt with the logics of relationships of "acting for" beyond discussion of ways to optimally share rewards when the agent makes an "appropriate decision." Mitnick and Ross, independently, named the approach, the "theory of agency." The first application of the institutional stream of agency from Mitnick's work was by Banfield (1975); the first application of the economic theory of agency from Ross was by Heckerman (1975). On the origin of the theory of agency, see Mitnick (2019). On the law of agency, see American Law Institute, 2006. 2. Eisenhardt (1989) cites Mitnick (1986 [published in 1992]) as a scholarly use in political science. This is mistaken. The paper cited is in management (organization theory), not in political science at all, and Mitnick (with Ross) was the originator of the theory of agency, not author only of an application of it. Eisenhardt's treatment of the origin of agency is not correct. 3. Examples of this critical literature include Blair & Stout, 2001, 2008; Donaldson, 1990; Davis et al., 1997; Ghoshal, 2005; Heracleous & Lan, 2012; Hirsch et al., 1987; Kaufman & Page 11 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Academy of Management Discoveries 11 Englander, 2005; Lan & Heracleous, 2010; Lubatkin, 2005; Lubatkin et al., 2007; Perrow, 1986; Spender, 2011; Stout, 2012; cf. Husted's (2007) analysis. 4. But see substantially earlier work on norms of agency and exchange, Stinchcombe, 1986[1975]; Mitnick, 1973, 1974, 1975a, 1975b, 1976a; cf. Arrow, 1963. 5. Agency can be modeled as multi-level: Any social actor may be in a relationship of agency with another social actor, at any level. That is, we can model agents for individuals, organizations, systems, or any collective as principal. 6. That the theory of agency is a theory of the management of inevitable imperfection was recognized almost immediately. Banfield (1975), using Mitnick's theory of agency, proposed that corruption in government as agency should be seen as endogenous -- as an unavoidable, almost baked-in feature resulting from the incentives, structure, and setting of the public sector. 7. For example, the classic problem of adverse selection in the risk-focused literature on agency takes on new forms across organizational boundaries: Adverse selection divides into adverse claims as agents conceal their imperfection when applying to organizations for membership, and adverse performance as their behavior is observed and iteratively directed/corrected once inside the organization (on delegation in organizations as agency, see Mitnick, 1994a, 1994b; on agency problems, see also Mitnick, 1984). 8. Figure 1 focuses on the motivational setting, and is not intended to be a general model of the range of variables that affect the general agency relationship. 9. See also, e.g., Mitnick, 1975b, 1976a; for other applications of incentive relations in agency, see, e.g., Backoff & Mitnick, 1981 on incentive relations in higher education; Mitnick, 1980a, 1980b, 1982, 1991, on incentive relations in government regulation. 10. On the rationale for agency, see, e.g. Mitnick, 1984; Mitnick, 1993, chap. 4, pp. 90-124. Academy of Management Discoveries 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Page 12 of 21 12 11. Embedded in the logic of delegation is the moving target of an optimization model that depends on context and environment, with the front-end costs of investing in more perfect agency balanced with the discounted future benefits of adaptable agency that, if not originally perfect, becomes closer to perfect just-in-time. 12. Some of the agency literature has incorrectly claimed novelty in introducing such social norms to agency theory (e.g., Casadesus-Masanell, 2004 and Casadesus-Masanell & Spulber, 2005, which appeared about 30 years after norms were first explicitly discussed in the theory of agency in Mitnick, 1973, 1974, 1975a, b; also see Stinchcombe, 1986, whose book incorporated his 1975 paper on norms of agency; see Shapiro, 1987, 2005; on the role of fiduciary duties, which have norm-like functions, see, e.g., Easterbrook & Fishel, 1991, 1993). Page 13 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Academy of Management Discoveries 13 FIGURE 1 Individual-Level Model of the Basic Incentive System Source: Mitnick & Backoff (1984); on the incentive relation, see also Backoff & Mitnick, 1981; Mitnick, 1980a, b; Mitnick, 1991. [Reproduced from original source.] Academy of Management Discoveries 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Page 14 of 21 14 FIGURE 2 Typology of Agency Source: Mitnick (1974, 1976a) [Reproduced from original source.] Page 15 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Academy of Management Discoveries 15 REFERENCES American Law Institute. 2006. Restatement of the Law Third, Agency. Philadelphia, PA: American Law Institute; Deborah DeMott, Reporter. Alchian, A. A. 1965. The basis of some recent advances in the theory of management of the firm. Journal of Industrial Economics, 14(1): 30-41. Alchian, A. A., & Demsetz, H. 1972. Production, information costs, and economic organization. American Economic Review, 62(5): 777-795. 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Journal of Management Studies, 49(1): 223239. https://doi-org.pitt.idm.oclc.org/10.1111/j.1467-6486.2011.01009.x Hirsch, P., Michaels, S., & Friedman, R. 1987. "Dirty hands" versus "clean models": Is sociology in danger of being seduced by economics? Theory and Society, 16(3): 317-336. Husted, B. W. 2007. Agency, information, and the structure of moral problems in business. Organization Studies, 28(2): 177-195. Jensen, M. C., & Meckling, W. H. 1976. Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4): 305-360. Kaufman, A., & Englander, E. 2005. A team production model of corporate governance. Academy of Management Executive, 19(3): 9-22. https://doi.org/10.5465/ame.2005.18733212 Lan, L. L., & Heracleous, L. 2010. Rethinking agency theory: The view from law. Academy of Management Review, 35(2): 294-314. https://doi.org/10.5465/amr.35.2.zok294 Lubatkin, M. 2005. A theory of the firm only a microeconomist could love. Journal of Management Inquiry, 14(2): 213-216. Lubatkin, M., Lane, P. J., Collin, S., & Very, P. 2007. An embeddedness framing of governance and opportunism: Towards a cross-nationally accommodating theory of agency. Journal of Organizational Behavior, 28(1): 43-58. Martin, G. P., Wiseman, R. M., & Gomez-Mejia, L. R. 2016. Bridging finance and behavioral scholarship on agent risk sharing and risk taking. Academy of Management Perspectives, 30(4): 349-368. https://doi.org/10.5465/amp.2012.0134s Mitnick, B. M. 1973. Fiduciary rationality and public policy: The theory of agency and some consequences, Paper presented at the 1973 Annual Meeting of the American Political Science Association, New Orleans, LA. Proceedings of the APSA, 1973 (University Microfilms). Available at SSRN: http://dx.doi.org/10.2139/ssrn.1020859 Mitnick, B. M. 1974. The theory of agency: The concept of fiduciary rationality and some consequences: Unpublished Ph.D. dissertation, Department of Political Science, University of Pennsylvania. Mitnick, B. M. 1975a. The theory of agency: The fiduciary norm: Paper presented at the 1975 Annual Meeting of the American Sociological Association, San Francisco, CA. College of Administrative Science, Ohio State University, Working Paper WPS 75-7, March 1975. Academy of Management Discoveries 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Page 18 of 21 18 Mitnick, B. M. 1975b. The theory of agency: The policing "paradox" and regulatory behavior. Public Choice, 24: 27-42. Available at SSRN: https://ssrn.com/abstract=1021143 Mitnick, B. M. 1976a. The theory of agency: A framework: Paper presented at the 1976 Annual Meeting of the American Sociological Association, New York, NY. College of Administrative Science, Ohio State University, Working Paper WPS 75-17, June 1975. Available at SSRN: http://dx.doi.org/10.2139/ssrn.1021642 Mitnick, B. M. 1976b. A typology of conceptions of the public interest. Administration and Society, 8(1): 5-28. https://doi-org.pitt.idm.oclc.org/10.1177/009539977600800102 Mitnick, B. M. 1980a. The political economy of regulation: Creating, designing, and removing regulatory forms. New York: Columbia University Press. Mitnick, B. M. 1980b. Incentive systems in environmental regulation. Policy Studies Journal, 9(3): 379-394. DOI: 10.1111/j.1541-0072.1980.tb00947.x Mitnick, B. M. 1982. Regulation and the theory of agency. Review of Policy Research [was Policy Studies Review], 1(3): 442-453. https://doi-org.pitt.idm.oclc.org/10.1111/j.15411338.1982.tb00448.x Mitnick, B. M. 1984. Agency problems and political institutions. Paper presented at the 1984 Annual Meeting of the Midwest Political Science Association, Palmer House, Chicago, IL, April 12-14. Available at SSRN: http://dx.doi.org/10.2139/ssrn.2338579 Mitnick, B. M. 1991. An incentive systems model of the regulatory environment. In M. J. Dubnick, & A. R. Gitelson (Eds.), Public policy and economic institutions, Vol. 10: 147-204. Greenwich, CT: JAI Press. Mitnick, B. M. 1992/1986. The theory of agency and organizational analysis. In N. Bowie, & R. E. Freeman (Eds.), Ethics and agency theory: 75-96. New York: Oxford University Press. Available at SSRN: https://ssrn.com/abstract=2164770 Mitnick, B. M. 1993. Strategic behavior and the creation of agents. In B. M. Mitnick (Ed.), Corporate political agency: The construction of competition in public affairs: 90-124. Newbury Park, CA: Sage Publications. Mitnick, B. M. 1994a. The hazards of agency. Paper presented at the 1994 Annual Meeting of the American Political Science Association, New York, NY, September 1-4. Available at SSRN: http://dx.doi.org/10.2139/ssrn.1417412 Mitnick, B. M. 1994b. Delegation of specification: An agency theory of organizations: Paper presented at the 1994 Annual Meeting of the Academy of Management, Loews Anatole Hotel, Dallas, TX, August 14-17. Available at SSRN: http://dx.doi.org/10.2139/ssrn.1021332 Page 19 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Academy of Management Discoveries 19 Mitnick, B. M. 1999. Credible testaments, property, and the role of government. In N. Mercuro, & W. J. Samuels (Eds.), The fundamental interrelationships between government and property, Vol. 4 in the series The economics of legal relationships: 165-176. Stamford, CT: JAI Press. Mitnick, B. M. 2000. Commitment, revelation, and the testaments of belief: The metrics of measurement of corporate social performance. Business & Society, 39(4): 419-465. Mitnick, B. M. 2009. Assurance and reassurance: The role of the board. In R. W. Kolb, & D. Schwartz (Eds.), Corporate boards: Managers of risk, sources of risk: 294-315. Hoboken, NJ: WileyBlackwell. Available at SSRN: https://ssrn.com/abstract=1278110 Mitnick, B. M. 2019. Origin of the theory of agency: An account by one of the theory's originators. Available at SSRN: http://dx.doi.org/10.2139/ssrn.1020378 Mitnick, B. M., & Backoff, R. W. 1984. The incentive relation in implementation. In G. C. Edwards, III (Ed.), Public policy implementation, Vol. 3: 59-122. Greenwich, CT: JAI Press. Available at SSRN: https://ssrn.com/abstract=3413204 Perrow, C. 1986. Complex organizations: A critical essay (3rd ed.). New York: Random House. Reiss, S., & Havercamp, S. M. 1998. Toward a comprehensive assessment of fundamental motivation: Factor structure of the Reiss profiles. Psychological Assessment, 10(2): 97-106. Ross, S. A. 1973. The economic theory of agency: The principal's problem. American Economic Review, 62(2): 134-139. Ross, S. A. 1974. On the economic theory of agency and the principle of similarity. In M. Balch, D. McFadden, & S. Wu (Eds.), Essays on economic behavior under uncertainty: Chap. 8. NorthHolland. Schwartz, S. H. 2012. An overview of the Schwartz theory of basic values. Online Readings in Psychology and Culture, 2(1). https://doi.org/10.9707/2307-0919.1116f Shapiro, S. P. 1987. The social control of impersonal trust. American Journal of Sociology, 93(3): 623658. Shapiro, S. P. 2005. Agency theory. In K. S. Cook & D. S. Massey (Eds.), Annual Review of Sociology, Vol. 31: 263-284. Palo Alto, CA: Annual Reviews. Shapiro, S. P. 2016. Standing in another’s shoes: How agents make life-and-death decisions for their principals. Academy of Management Perspectives, 30(4): 404-427. https://doi.org/10.5465/amp.2013.0158 Smith, A. 1776/1994. An inquiry into the nature and causes of the wealth of nations. New York: Modern Library. Academy of Management Discoveries 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Page 20 of 21 20 Spence, A. M., & Zeckhauser, R. 1971. Insurance, information, and individual action. American Economic Review, 61(2): 380-387. Spender, J.-C. 2011. Human capital and agency theory. In A. Burton-Jones & J.-C. Spender (Eds.), The Oxford handbook of human capital. Oxford: Oxford University Press. Stinchcombe, A. L. 1986 [1975]. Stratification and organization: Selected papers. Cambridge: Cambridge University Press. Includes: Stinchcombe, A. L. 1975. Norms of exchange: Status, authority, and fiduciary norms in organizations. Paper presented at the 1975 Annual Meeting of the Public Choice Society, Chicago, IL. Stout, L. 2012. The shareholder value myth: How putting shareholders first harms investors, corporations, and the public. San Francisco: Berrett-Koehler Publishers. Wiseman, R. M., Cuevas-Rodriguez, G., & Gomez-Mejia, L. R. 2012. Towards a social theory of agency. Journal of Management Studies, 49(1): 202-222. https://doi-org.pitt.idm.oclc.org/10.1111/j.1467-6486.2011.01016.x Wiseman, R. M., & Gomez-Mejia, L. R. 1998. A behavioral agency model of managerial risktaking. Academy of Management Review, 23(1): 133-153. https://doi.org/10.5465/amr.1998.192967 Barry M. Mitnick ([email protected]) is Professor of Business Administration and of Public and International Affairs in the Katz Graduate School of Business at the University of Pittsburgh. His research focuses on the institutional theory of agency and the theory of testaments, the generation of assurance of/belief in the credibility of organizational actions, behavior in regulatory organizations, "wicked wicked problems," and the theory of integrative ethics. In 2014 he received the Sumner Marcus Award of the SIM Division of the Academy of Management. Page 21 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Academy of Management Discoveries 21