Using an Agency-Based Approach to Analyze Collaborative Federated Interorganizational Relationships

Abstract

An agency-based approach is used to analyze the factors that affect the creation and maintenance of collaborative federated interorganizational relationships. An overview of several theoretical perspectives on federative collaborations is presented, and these are found to imply a strong agency component. Agency theory suggests four generic situations that lead principals to seek agents to act on their behalf, which result in "contentful, " practical, symbolic, and systemic agency. The predominant agency costs to be managed are associated with specifying, rewarding, and monitoring and policing agent behavior; the predominant agent problems are agent information acquisition, agent preference mismatch, agent effort, and agent capability. Three types of federations and federation management organizations are formed-participatory, independent, and mandated -as different means to solve different agency problems. The costs and problems most significant for each type of federation are noted, and an assessment of federation efficiency based on minimizing agency costs and problems is suggested.

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