Rent extraction,principal–agent relationships,and pricing strategies: vendor licensing during the 1996 Olympic Games in Atlanta

Two‐part pricing, price‐discrimination, rent creation and extraction, principal–agent theory, and public choice perspectives on public bureaucracies are used to interpret a vendor‐license marketing arrangement and controversy arising out of the 1996 Olympic Games in Atlanta, GA. Containing features predicted by principal–agency theory, Atlanta's arrangement with its marketing agent was a response to the behavior of public bureaucracies and a low cost method of converting visitors' consumer surplus to rent, which could be extracted by the marketing agent and then by Atlanta. Atlanta's incentive to enforce vendor property rights was influenced by the nature of the game between Atlanta and prospective vendors. Copyright © 2001 John Wiley & Sons, Ltd.     

Agency Problems in Diverse Contexts: A Global Perspective

abstract    Bruce, Buck and Main (2005 ) offer two criticisms of agency theory as a valid model of executive behaviour. First, they suggest that because researchers have failed to find a strong empirical link between executive pay and firm performance, and since this research generally rests on models derived from agency theory, then we must question the theory. Second, they suggest that agency theory is under-socialized and therefore lacks generalizability to settings where social solutions would seem to eliminate the agency problem. In our response we make three points. First, agency theory rests on an assumption of self-interest that does not necessarily reflect opportunism. Second, agency theory does not make any reference to pay-performance sensitivity, and the failure of this research can be attributable to a variety of problems with the research. Third, we agree that agency theory does not explicitly recognize contextual factors, but suggest that this abstraction from context, gives agency theory greater generalizability. Finally, we review the UK and German contexts discussed by Bruce, Buck and Main to show that socialized solutions do not prevent the occurrence of agency problems.     

An agency analysis of church–pastor relations

Incentives are critical to the study of economics. But do they work in non‐traditional economic settings, such as religious organizations, in a manner consistent with economic theory? This study considers the agency relationship between churches and their clergy. This paper contends that pastor compensation is not typically tied directly to performance, but rather indirectly through promotion tournaments. Pastors whose performance is recognized as being exceptional are rewarded by being called to larger, more prestigious congregations. Given the difficulty of observing and measuring pastor performance this represents a sensible solution to the church–pastor principal–agent problem. Copyright © 2001 John Wiley & Sons, Ltd.     

From National Service to Global Player: Transforming the Organizational Logic of a Public Broadcaster

We present organizational logics as a meso‐level construct that lies between institutional theory's field‐level logics and the sense‐making activities of individual agents in organizations. We argue that an institutional logic can be operationalized empirically using the concept of a discourse – that is, a coherent symbolic system articulating what constitutes legitimate, reasonable, and effective conduct in, around, and by organizations. An organization may, moreover, be simultaneously exposed to several institutional logics that make up its broader ideational environment. Taking these three observations together enables us to consider an organizational logic as a spatially and temporally localized configuration of diverse discourses. We go on to show how organizational logics were transformed in the Australian Broadcasting Corporation between 1953 and 1999 by examining the changing discourses that appeared in the Corporation's annual reports. We argue that these discourses were modified through three main forms of discursive agency: (1) undertaking acts of ironic accommodation between competing discourses; (2) building chains of equivalence between the potentially contradictory discourses; and (3) reconciling new and old discourses through pragmatic acts of ‘bricolage’. We found that, using these forms of discursive agency, a powerful coalition of actors was able to transform the dominant organizational logic of the ABC from one where the Corporation's initial mission was to serve national interests through public service to one that was ultimately focused on participating in a globalized media market. Finally, we note that discursive resources could be used as the basis for resistance by less powerful agents, although further research is necessary to determine exactly how more powerful and less powerful agents interact around the establishment of an organizational logic.     

Examining the Relationships Between Monitoring and Incentives in Corporate Governance*

abstract Agency theory focuses on monitoring and incentives as two solutions to agency problems. Prior research suggests that monitoring and incentives may act either as substitutes or as complements, and that the context of the agency relationship plays a major role in determining the direction of the relationship between them. In a corporate governance setting, we contend that board information and boards' usage of CEO control mechanisms are best viewed as complements. Thus, we hypothesize that boards' information gathering behaviour will be positively related to boards' usage of CEO control mechanisms. Using primary and secondary data from 149 US firms, we find that increases in boards' information gathering are associated with increases in boards' usage of managerial controls. These findings suggest that information and managerial control mechanisms act as complements in the governance context, and that boards take a variety of actions to protect the interests of shareholders.     

The Donovan report as evidence‐based policy

The Donovan Royal Commission set new standards in evidence‐based policy making. The paper puts the Commission's research programme in its 1960s context of disorderly workplace labour relations. It reviews each of the studies, concluding that they were innovative and had a powerful influence over the Commission's recommendations. In retrospect, the scope of topics researched was too narrow to engage with major future challenges. That apart, the precedent of research based on case studies, surveys and historical analysis has continued to enhance employment‐related policy making.     

Board gender diversity and corporate environmental performance: The moderating role of family and dual‐class majority ownership structures

While prior work has investigated the impact of (a) ownership structure and (b) board gender diversity separately on corporate environmental performance, researchers have not studied the potentially important relationship between ownership control and female board diversity in influencing corporate environmental performance jointly. We do so in the context of majority ownership in family‐controlled and dual‐class firms whose motives and influence are theoretically different from that of the firm's minority shareholders. Drawing on resource dependency, socioemotional wealth theory, and secondary agency theory, we hypothesize that majority family owners and dual‐class owners likely choose women directors to help advance their personal preferences for environmental corporate social responsibility. Our empirical tests utilizing 2,755 U.S. firm years over the 2010–2015 show that, as hypothesized, these two majority ownership types interact with board gender diversity to positively influence corporate environmental performance.     

Playing God? the Performance of Appraisal

The authors argue here that work on performance appraisal suffers form a narrow theoretical perspective and a variety of methodological limitations. the narrow theoretical base appears as a consequence of the treatment of performance appraisal within a largely neo-human relations perspective. More recently, however, a critical debate on appraisal has emerged. In order to further this debate, we analyse performance appraisal from the contrasting perspectives of labour process theory and the writings of Michel Foucault. This analysis points to a number of limitations of both mainstream work on appraisal and more recent critical studies. From this, we argue that though appraisal can be seen as a means of manufacturing consent among employees, it should not necessarily be seen as a zero-sum game solely benefiting management groups. At the same time, however, appraisal must be viewed within the wider context of other forms of performance management, surveillance and accountability. Finally, we note that while labour process and Foucauldian perspectives help to contextualise and critique work on appraisal, both are limited by a lack of attention to human agency.     

Signalling Theory and Equilibrium in Strategic Management Research: An Assessment and a Research Agenda

Actors within organizations commonly must make choices armed with incomplete and asymmetrically distributed information. Signalling theory seeks to explain how individuals are able to do so. This theory's primary predictive mechanism is ‘separating equilibrium’, which occurs when a signal's expectations are confirmed through experience. A content analysis finds that most strategic management signalling theory studies have not fully leveraged separating equilibrium. This presents two possible paths for future research. First, some researchers may wish to incorporate separating equilibrium. We illustrate how doing so can uncover new relationships, generate novel insights, and fortify the theory's application. Others who want to theorize about signals, but not examine separating equilibrium, could integrate ideas from signalling theory with other information perspectives. Here a signal becomes one stimulus among many that corporate actors interpret and act upon. We provide research agendas so strategy scholars can apply signalling theory most effectively to meet their research objectives.     

An intra-organizational perspective on supply management involvement in contracting services

The relationship between an agent (supply management) and a principal (client functional user) can be studied by using agency theory as a theoretical background. In this study, perceptions of conflict, information asymmetry and risk were examined in relation to perceptions of internal outcomes of supply management’s involvement in services contracting in an intra-organizational dyadic context. Structural equation modeling and regression analysis were used to analyze the nature of the relationships. The contribution is integrating a structured view of internal outcomes with three concepts from agency theory to help build a more comprehensive theory of intra-organizational relationships in the context of services contracting.     

The use of executive share-based compensation in Poland: investigating institutional and agency-based determinants in an emerging market

In this paper we investigate the under-researched topic of the use of executive share-based compensation in Poland, and we analyse empirically whether theoretical explanations developed and applied mainly in the context of developed countries also hold in this specific context. Building on agency and institutional theories we study the determinants of using executive share-based pay in 362 companies listed on the Warsaw Stock Exchange. As a result, we highlight the role of the state in Polish firms and the need to consider specifically principal–principal conflicts typical of emerging economies in post-state-socialist organisational research. Our findings not only reflect particularities of the institutional environment in the country studied but also highlight the limits of the traditional principal–agent lens applied in emerging economies.     

Agency Theory,Institutional Sensitivity,and Inductive Reasoning: Towards a Legal Perspective

Making agency theory institutionally sensitive is a reasonable suggestion, as far as normal science stands. However, we argue that such a move has already been taking place, that it cannot address important problems with agency theory, and that the time is ripe for a critical re‐examination of this theory. We suggest that inductive studies can not only be more sensitive to institutional features than deductive studies, but they can also offer deeper understanding of governance practices in specific contexts, as well as the potential for analytical or moderatum generalizations. Drawing from legal theory, we offer an alternative conception of the principal, and of the role and status of the board of directors. We contend that this reformulated agency theory has a greater potential of being institutionally sensitive because it recognizes various stakeholders as team members, rather than just adding specific institutional features as variables to the dominant conception of agency theory.     

How should a principal reward and support agents when firm performance is characterized by success or failure?

Principal‐agent models with multiple agents typically assume that the principal wishes to maximize the sum of the agents' achievements (net of the rewards paid to them). But in many settings, like R&D, all that the principal “needs” is that at least one agent will be “successful.” We identify settings where the principal actually wants agents to refrain from exerting high effort in order to save expected compensation. We show that the number of agents can decrease in the project's value for the principal. We also consider sequential efforts and investigate settings where the principal can provide support to agents.     

Narrow Replication of Fisman and Miguel's (2007a) ‘Corruption,Norms, and Legal Enforcement: Evidence from Diplomatic Parking Tickets’

This note provides a narrow replication of Fisman and Miguel's (Journal of Political Economy, 2007a; 115 (6): 1020–1048) original findings about estimating negative binomial count models to study corruption practices among United Nations diplomats. We present estimates based on zero‐inflated count models, given the possible presence of excessive zero counts in the dependent variable of the main specifications. Our results confirm Fisman and Miguel's original findings. However, they also suggest the importance of considering distinct generating processes for zero outcomes. We cannot reject hypotheses favoring the use of zero‐inflated negative binomial models over its simpler versions in this context. Copyright © 2016 John Wiley & Sons, Ltd.     

Does CEO compensation matter in boosting firm performance? Evidence from listed French firms

The paper investigates the impact of chief executive officer (CEO) compensation on firm performance from a sample of 155 listed French companies on SBF 120, over 2009–2018. Findings suggest that an increase in CEO compensation seems to improve the accounting‐based firm performance, nevertheless it hurts the firm stock market value. More pronounced results are reported when we control for sector compensation interactions. We argue that attractive compensation may improve the executive services in achieving shareholders' objectives, but investors seem to not appreciate a CEO compensation increase. Based on the agency theory, it might be argued that investors fear possible executive opportunistic behavior encouraging them to enjoy overcompensation .     

‘There are Really Two Cities Here’: Fragmented Urban Citizenship In Tel Aviv

The inflow of African migrants into Tel Aviv's southern neighborhoods has aroused much resentment from long‐term residents. Contesting the uneven burden sharing, which exacerbates already poor conditions at the local level, southern residents have aimed their grievances at municipal and national policymakers as well as the city's more affluent northern residents. In analyzing the contestation, this article challenges traditional conceptions of migrants as the binary opposition to residents of the host city, intruders on the shared and socio‐culturally homogenous urban arena. We build on recent theorizations of urban citizenship as an agency‐centered process to think through the ways in which city residents articulate their identities relationally and hierarchically against new and old ‘others’ and argue that international newcomers have destabilized long‐conceived social relations. Using narratives of long‐term southern residents, we illustrate how the uneven geographies of African migrants' settlement in Tel Aviv have (re)set in motion a process of urban citizenship formation by southern residents, thereby adding new layers of contention to what was already a highly stratified realm.     

The mediating role of leader–member exchange: a study of job satisfaction and turnover intentions in temporary work

This paper focuses on turnover intentions in temporary work. Specifically, we analyse whether job satisfaction and leader–member exchange (LMX) play the same role as antecedents of turnover intentions for both temporary and permanent employees. Results from a total‐effects moderation model based on a survey of 593 individuals placed by a temporary work agency suggest that temporary work lessens the impact that high job satisfaction has in terms of reducing turnover intentions. Furthermore, while for permanent employees, high‐quality LMX relationships play a central role in the link between job satisfaction and turnover intentions; for temporary employees, job satisfaction is less important in the formation of high‐quality LMX relationships. Therefore, we contribute to knowledge on turnover intentions in temporary work by showing that within this context, turnover intentions cannot be directly remedied by high job satisfaction and that temporary work inhibits LMX's reinforcing role in the relationship between job satisfaction and turnover intentions.     

Task-specific abilities in multi-task principal–agent relationships

This paper analyzes a multi-task agency framework where the agent exhibits task-specific abilities. It illustrates how incentive contracts account for the agent's task-specific abilities if contractible performance measures do not reflect the agent's multidimensional contribution to firm value. This paper further sheds light on potential ranking criteria for performance measures in multi-task principal–agent relationships. It demonstrates that performance measures in multi-task agencies cannot necessarily be compared by their respective signal-to-noise ratio as in single-task agency relationships. In fact, it is indispensable to take the induced effort distortion and the measure-cost efficiency into consideration—both determined by the agent's task-specific abilities.     

The importance of input control to work performance under the agency theory framework

In the agency theory literature, output and behavioral controls have been quite thoroughly explored. However, input control (IC) that emphasizes personnel selection and staffing has only been discussed theoretically. Literature outside the agency theory, nonetheless, corroborates IC when competitions increase. With an empirical approach to strategic human resource management, this study explored the relationships between controls and work performance under the influences of two agency factors: principal–agent relationship and task programmability. Results show that controls are generally associated with work performance but more important are their moderating effects with the two contingent agency factors. Furthermore, hierarchical regression analyses reveal that IC is a vital factor for work performance. These findings suggest that IC deserves more attention under the conditions of increased competition.     

A reformulation of the maxmin expected utility model with application to agency theory

Invoking the parameterized distribution formulation of agency theory, the paper develops axiomatic foundations of the principal’s and agent’s choice behaviors that are representable by the maximization of the minimum expected utility over action-dependent sets of priors. In the context of this model, the paper also discusses some implications of ambiguity aversion for the design of optimal incentive schemes.