The Problem of Unilateralism in Agency Theory: Towards a Bilateral Formulation

Pouryousefi, Sareh; Frooman, Jeff

doi:10.1017/beq.2016.77

Cited by 16 publications

(11 citation statements)

References 65 publications

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“…Furthermore, collaboration and integration can also be improved and strengthened by using behavior-based mechanisms (Prosman et al ., 2016). Studies also highlight the role of trust, reciprocity, and the intrinsic motivation of agents towards their principals (Pouryousefi and Frooman, 2017; Xu et al ., 2019) which could not be achieved through outcome-based incentives alone.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Does organizational readiness matter in lean thinking practices? An agency perspective

Akmal

Podgorodnichenko

Greatbanks

et al. 2022

IJOPM

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PurposeExtant research documents the importance of lean thinking for organizations, however, as prior research has largely focused on hard lean practices, but little is known about the effects or the significance of soft lean practices. This research attempts to address this issue by examining how soft lean practices enhance organizational lean readiness, and in turn increase the success of lean implementation.Design/methodology/approachThis research adopts a single case study design in a small-medium enterprise livestock feed manufacturing organization, and investigates the period from late 2011 through the end of 2019 covering two attempts at lean implementation – an initial failed attempt followed by a successful introduction of lean within the case organization. The research analyzes interviews with 29 managers and employees from all organizational levels and departments within the case organization. Secondary data including organizational documents and performance measures and metrics were also incorporated into the research design.FindingsDrawing on agency theory, the authors advance a principal-agent interaction perspective to conceptualize organizational lean readiness – specifically, the authors consider the “state or condition” of four agency factors (goal conflict, information asymmetry, risk aversion and length of relationship), and explore if these four agency factors can be utilized as proxies for organizational readiness for lean implementation. The authors identify the formation of a shared vision and identity within the organization as an effective mechanism through which soft lean practices enhance organizational lean readiness. Finally, the analysis offers an understanding of how the long-term success of lean implementation is improved by the introduction of soft lean practices as a prerequisite to create organizational readiness for the implementation of hard lean practices.Originality/valueThe study is unique in the sense that it empirically links agency theory and the role of soft lean practices in developing organizational lean readiness in a small-medium enterprise context by defining the ideal state of four agency factors as proxies for organizational readiness.

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Section: Theoretical Backgroundmentioning

confidence: 99%

Does organizational readiness matter in lean thinking practices? An agency perspective

Akmal

Podgorodnichenko

Greatbanks

et al. 2022

IJOPM

View full text Add to dashboard Cite

show abstract

“…Reporting or accounting for performance is located within accountability theory, which, in turn, is rooted within agency theory, which postulates that agents must account to their principals for their performance (Bosse and Phillips, 2016; Clark, 2016; Coupet and McWilliams, 2017; Pouryousefi and Frooman, 2017; Ştefánescu et al , 2016). Accountability involves justifying actions provided by a person or group of persons, to others (Lerner and Tetlock, 1999).…”

Section: Literature Reviewmentioning

confidence: 99%

Internal audit’s evolving performance role: lessons from the South African public sector

Moodley

Ackers

Odendaal

2021

JAOC

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Purpose The formal adoption of internal auditing within the South African public sector was made compulsory by the Public Finance Management Act, No. 1 of 1999. Despite internal auditing’s primary role of adding value and assisting organisations to accomplish pre-defined strategic objectives, the increasing frequency of service delivery protests in South Africa, suggests that mandatory internal auditing may not have contributed to improving public sector performance and enhancing service delivery, as envisaged. This paper aims to identify the factors preventing internal audits from effectively contributing to improved public sector performance and service delivery. Design/methodology/approach The study adopted a sequential mixed-methods research approach. Firstly, a survey instrument was used to collect empirical data from survey respondents at South African national government departments. Secondly, semi-structured interviews and focus group discussions were held with a purposively selected sample of participants to explore the observations from the first phase. The observations from the first two phases were validated through an analysis of pertinent documents and records. Findings Despite all departments adopting internal auditing, management’s expectations of internal auditing and the services provided by the internal audit function diverged. The results suggest that the emergence of a compliance approach to organisational governance together with poor performance management skills has impaired internal auditing’s ability to effectively contribute to strategic and performance management. Research limitations/implications Despite its South African orientation, as internal auditing is a global association and given that service delivery protests continue to occur in several countries around the world, increases the study’s international relevance. Moreover, the mandate of internal auditing requires it to add value to an organisation irrespective of its geographical location. Originality/value The study contributes to the existing body of knowledge on internal auditing, particularly its adoption and implementation in the South African public sector. In addition to identifying the factors inhibiting effective internal auditing, the study advances a suggested framework for the future of internal auditing.

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“…This study uses agency theory, which has been widely used for decades in such fields as economics, finance, marketing and management (Eisenhardt, 1989). The theory addresses economic and management phenomena in markets and organizations, exploring differences and asymmetry in information and motivation at various managerial levels of the organization (Eisenhardt, 1989; Pouryousefi and Frooman, 2017; Sappington, 1991). This helps in understanding the complexities caused by these differences at various levels of management (Parker et al , 2018).…”

Section: Introductionmentioning

confidence: 99%

Intraorganization conflicts of interest in hospitals adapting to a changing ecosystem

Naamati-Schneider

2021

JHOM

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PurposeHealth systems function in an ecosystem that is turbulent and competitive because of demographic, economic, political, technological and lifestyle changes and sociopolitical influences, requiring hospitals to adopt comprehensive business strategies. Failure to do so may result in duplication, waste and deficits. This original article uses the prism of agency theory to examine differences in approach at two levels of hospital management and the consequent problems in the incorporation of necessary changes. Agency theory posits an inherent conflict of interest in organizations, including health organizations: the managers (agents) always aim to maximize their profit or personal interest instead of that of the owner or organization (principal), potentially causing difficulty in managing the organization. The aim is to generate recommendations for policymakers.Design/methodology/approachThe study is based on 30 semi-structured, in-depth interviews with key figures in the health system and on two levels of hospital management: senior managers and heads of selected departments. The analysis used a categorical qualitative methodology.FindingsThe main findings are five key themes: views of business behavior, asymmetry of interests, asymmetry of information, transparency and cooperation between various levels of management and ambivalence toward business in hospitals. The two levels of management are clearly divided in terms of interests, information and activity, leading to difficulty in cooperation, efficiency and achievement of organizational goals.Originality/valueUsing agency theory, this study provides a systemic and organizational view of hospitals' management and environmental adaptation. Understanding the processes and increasing cooperation at various managerial levels can help make the system more efficient and ensure its survival in a dynamic market.

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The Problem of Unilateralism in Agency Theory: Towards a Bilateral Formulation

Cited by 16 publications

References 65 publications

Does organizational readiness matter in lean thinking practices? An agency perspective

Does organizational readiness matter in lean thinking practices? An agency perspective

Internal audit’s evolving performance role: lessons from the South African public sector

Intraorganization conflicts of interest in hospitals adapting to a changing ecosystem

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