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The paper explores the influence of institutional frameworks on the evolution of the German software and biotechnology sectors. It links institutional constraints to poor performance of German firms in high volume market niches characterized by turbulent technological change and substantial financial risk. However, German firms are prospering in software services and “platform technologies” in biotechnology. The company organizational structures and investment strategies needed to excel in these market segments provide a close “fit” with incentives created within the German economy.

Prior scholarship on stewardship as a principle of administration largely portrays stewardship as too idealistic and dependent upon situational factors to be institutionalized in large-scale organizations. Through a case study of the Edmonton Public Schools, this study explores the extent to which stewardship can be institutionalized as a central organizing principle, thereby ensuring performance and checking corruption in ways that are consistent with the primacy of intrinsic motivation. The study deepens our understanding of the challenges that managers face in reconciling stewardship with a bureaucratic context, documents practices that have been used to deal with these challenges, and more broadly discusses how it might be possible for islands of stewardship to emerge in a world governed by assumptions of human opportunism. To this end the paper develops a model of the choice that organization members face in deciding to elect a principal-agent or a stewardship posture within large-scale organizations. This model draws on assumptions of human ambivalence in choosing between self-serving and altruistic modes of conduct.

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