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The purpose of this paper is to provide a critical historical analysis of the business (mis)behaviors and influencing factors that discourage enduring cooperation between principals and agents, to introduce strategies that embrace the social values, economic motivation and institutional designs historically adopted to curtail dishonest acts in international business and to inform an improved principal–agent theory that reflects principal–agent reciprocity as shaped by social, political, cultural, economic, strategic and ideological forces

The critical historical research method is used to analyze Chinese compradors and the foreign companies they served in pre-1949 China.

Business practitioners can extend orthodox principal–agent theory by scrutinizing the complex interactions between local agents and foreign companies. Instead of agents pursuing their economic interests exclusively, as posited by principal–agent theory, they also may pursue principal-shared interests (as suggested by stewardship theory) because of social norms and cultural values that can affect business-related choices and the social bonds built between principals and agents.

The behaviors of compradors and foreign companies in pre-1949 China suggest international business practices for shaping social bonds between principals and agents and foreign principals’ creative efforts to enhance shared interests with local agents.

Understanding principal–agent theory’s limitations can help international management scholars and practitioners mitigate transaction partners’ dishonest acts.

A critical historical analysis of intermediary businesspeople’s (mis)behavior in pre-1949 (1840–1949) China can inform the generalizability of principal–agent theory and contemporary business strategies for minimizing agents’ dishonest acts.

Although outcome sharing in construction is a well-established concept in the literature, there is still an ongoing debate on the most effective approach for distributing project outcomes between an owner and downstream contracting parties (DCPs). To address this issue, this paper aims to investigate an optimal framework for distributing project outcomes among various levels of subcontracting in construction projects. The framework includes contractors, subcontractors, sub-subcontractors and other related parties.

To formulate the optimization problem, the principal–agent model is utilized. The theoretical development is validated through an experiment conducted with employees from road construction companies.

When distributing outcomes among various levels of subcontracting, the sharing should be determined by their contribution to the outcome, effort costs, level of outcome uncertainty and risk preference.

This paper expands on the existing principal–agent theory by incorporating multiple levels of agents, transforming the conventional view of outcome sharing among downstream subcontracting levels into testable hypotheses and well-defined concepts. The paper has practical implications for industry practitioners seeking to effectively allocate benefits and costs throughout a project's subcontracting chain.

The construction industry has long been criticized for unethical conduct. The owner usually manages the contractor's opportunistic behaviors by employing a professional supervisor, but there is a risk of covert collusion between the supervisor and contractor. Based on the principal–agent theory and collusion theory, this paper aims to investigate optimal collusion-proof incentive contracts.

This paper presents a game-theoretic framework comprising an owner, supervisor and contractor, who interact and pursue maximized self-profits. Built upon the fixed-price incentive contract, cost-reimbursement contract, and revenue-sharing contract, different collusion-proof incentive contracts are investigated. A real project case is used to validate the developed model and derived results.

This paper shows that the presence of unethical collusion undermines the owner's interests. Especially, the possibility of agent collusion may induce the owner to abandon extracting quality information from the supervisor. Furthermore, information asymmetry significantly affects the construction contract selection, and the application conditions for different incentive contracts are provided.

This study still has some limitations that deserve further exploration. First, this study explores contractor–supervisor collusion but ignores the possibility of the supervisor abusing authority to extort the contractor. Second, to focus on collusion, this paper ignores the supervision costs. What's the optimal supervision effort that the owner should induce the supervisor to exert? Finally, this paper assumes that the colluders involved always keep their promises. However, what if the colluders may break their promises?

Several collusion-proof incentive contracts are explored in a project management setting. The proposed incentive contracts can provide the project owner with effective and practical tools to inhibit covert collusion in construction management and thus safeguard construction project quality.

This study expands the organization collusion theory to the field of construction management and investigates the optimal collusion-proof incentive contracts. In addition, this study is the first to investigate the effects of information asymmetry on contract selection.

This study aims to focus on public policy concerning the implementation of public procurement policies in Nigeria and Ghana toward achieving value for money in the procurement of goods, services and works. It specifically analyzes some major administrative challenges Nigeria and Ghana are faced with in the administration/implementation of public procurement policies toward achieving value for money. It looks at the relationship between the state (regulatory authorities) and substate (procurement entities) in the public sectors of Nigeria and Ghana.

A comparative case study approach is adopted, where the two countries are compared in terms of achieving value for money. Data was collected from multiple sources, including in-depth interviews. The use of official documents and direct observations at the procurement regulatory authorities and entities’ premises.

This study found Nigeria often used the four Es – economy, efficiency, effectiveness and equity while Ghana mainly used the traditional five rights (right quantity, right quality, right price, right place and right time) as their criteria for ensuring value for money. The major administrative challenges found include corruption, low capacity of procurement personnel and poor knowledge of the procurement laws.

It recommends effective collaboration between government and civil society groups in the fight against corruption in procurement-related activities, with the implication that there is a need for periodic training for public procurement officials.

It adds to the field of public procurement in terms of value for money in the procurement of goods, services and works in developing countries context.

This study aims to examine the impact of board characteristics on firm performance while also exploring the influential mechanisms that help Chinese listed companies establish effective boards of directors and strengthen their corporate governance mechanisms.

This paper uses machine learning methods to investigate the predictive ability of the board of directors' characteristics on firm performance based on the data from Chinese A-share listed companies on the Shanghai and Shenzhen stock exchanges in China during 2008–2021. This study further analyzes board characteristics with relatively strong predictive ability and their predictive models on firm performance.

The results show that nonlinear machine learning methods are more effective than traditional linear models in analyzing the impact of board characteristics on Chinese firm performance. Among the series characteristics of the board of directors, the contribution ratio in prediction from directors compensation, director shareholding ratio, the average age of directors and directors' educational level are significant, and these characteristics have a roughly nonlinear correlation to the prediction of firm performance; the improvement of the predictive ability of board characteristics on firm performance in state-owned enterprises in China performs better than that in private enterprises.

The findings of this study provide valuable suggestions for enriching the theory of board governance, strengthening board construction and optimizing the effectiveness of board governance. Furthermore, these impacts can serve as a valuable reference for board construction and selection, aiding in the rational selection of boards to establish an efficient and high-performing board of directors.

The study findings unequivocally demonstrate the superiority of nonlinear machine learning approaches over traditional linear models in examining the relationship between board characteristics and firm performance in China. Within the suite of board characteristics, director compensation, shareholding ratio, average age and educational level are particularly noteworthy, consistently demonstrating strong, nonlinear associations with firm performance. Within the suite of board characteristics, director compensation, shareholding ratio, average age and educational level are particularly noteworthy, consistently demonstrating strong, nonlinear associations with firm performance. The study reveals that the predictive performance of board attributes is generally more robust for state-owned enterprises in China in comparison to their counterparts in the private sector.

The effects of board composition on performance have long been discussed in management research using fractionalization measures. In this study, we propose an alternative measurement approach based on board polarization.

Using an exploratory analysis and applying the polarization measure to German Deutscher Aktienindex (DAX)-, Midcap-DAX (MDAX)- and Small Cap-Index (SDAX)-listed companies, this paper applies the polarization index to examine the relationship between board diversity and performance.

The results show that the polarization concept is well suited to measure principal-agent problems between the members of the management and supervisory boards. We reveal that board polarization is negatively associated with firm performance, as measured by return on investment (ROI).

This exploratory study shows that the measurement of board polarization can be linked to performance differences between companies, which offers promising starting points for further research.

Management of power distribution companies (discoms) in India has been historically criticized on the ground of inefficient management. Inefficiency in operations triggered management by private franchisees for promotion of managerial and technical expertise. However, franchise contracts have achieved mixed outcomes despite the business model being a decade old in the Indian power distribution sector. Therefore, this study sheds light on the drivers of discoms (principal) with the franchisees (agent) for the achievement of the common performance goals, highlighting the agency issues at multiple levels across the organizational hierarchies. The study seeks to acknowledge the commonalities and differences between and across varying levels.

A qualitative embedded single case study was conducted in an Indian state, namely Odisha. The study was built on archival analysis, personal observations and semi-structured interviews with the franchisors and franchisee officials across the organization's hierarchical levels. A conceptual model based on the review of prior literature formed the set of coding and presentation for the study.

The study provides insights on factors that play a role in effective power distribution management, operational efficiency and improved financial performance through the partnership of the principal and the agent.

The study is predominantly dependent upon interviews. This paved the way for the limitation of human biases. Additionally, deep insights were drawn from a single case study of a discom's decision to hire franchisees. However, this was at the cost of the number of organizations interviewed. The findings of the study could be built across other areas or nations.

There is adequate literature on franchising as a business model. However, literature is lacking in highlighting the commonalities and differences between different contracting parties and their impact on the performance of the contract. Additionally, there is a dearth of literature on franchising in the power distribution sector. Therefore, studying the model from multiple perspectives would contribute to the literature on the power sector and franchising.

Promoting technological innovation is important to address the complexity of major engineering challenges. Technological innovations include short-term innovations at the project level and long-term innovations that can enhance competitive advantages. The purpose of this study is to develop an incentive mechanism for the public sector that considers short-term and long-term efforts from the private sector, aiming to promote technological innovation in major engineering projects.

This study constructs an incentive model considering the differences in short-term and long-term innovation efforts from the private sector. This model emphasizes the spillover effect of long-term efforts on current projects and the cost synergy effect between short-term and long-term efforts. It also explores the factors influencing the optimal incentive strategies for the public sector and innovation strategies for the private sector.

The results indicate that increasing the output coefficient of short-term and long-term efforts and reducing the cost coefficient not only enhance the innovation efforts of the private sector but also prompt the public sector to increase the incentive coefficient. The spillover effect of long-term innovation efforts and the synergy effect of the two efforts are positively related to the incentive coefficient for the public sector.

This research addresses the existing gap in understanding how the public sector should devise incentive mechanisms for technological innovation when contractors acting as the private sector are responsible for construction within a public-private partnership (PPP) model. In constructing the incentive mechanism model, this study incorporates the private sector's short-term efforts at the project level and their long-term efforts for sustained corporate development, thus adding considerable practical significance.

As climate change has become a growing concern, sustainable development has become increasingly important. Emissions reduction is a key step for more efficient energy use. In the last few years, the residential building sector in Croatia has received financial support for multi-dwelling building energy efficiency retrofits (EERs). However, some of these projects encountered difficulties due to information asymmetry between the key participants. This study aims to address the problem from the perspective of the principal-agent theory, which is concerned with information asymmetry and the asymmetry's repercussions.

A social network analysis is conducted to reflect the operation and management (OM) details of Croatian multi-dwelling buildings. The key stakeholders of EER are mapped, along with the contractual and communication ties between them. Using the Gephi software, relationship data are visually represented and statistically evaluated.

The analysis indicated two different clusters or groups of stakeholders in EERs in Croatia and enabled the mapping of key relationships between stakeholders. The findings stress the importance of the key relationship between owner representatives (ORs) and property managers (PMs).

The contribution of this study is the development of framework for blockchain implementation in EERs, which can be adapted for use in different markets and/or projects. Blockchain is proposed for minimization of information asymmetry between different stakeholders. Blockchain enables communication and cooperation during project development and enhances trust among stakeholders.

Family businesses are essential to the global economy but often grapple with family-related issues, especially during succession. This study explores how governance tools like the family protocol (FP) mitigate conflicts by setting standards for family firm management and continuity. Pioneering the use of game theory and adverse selection setups in family business governance, this research uncovers FP determinants.

This research employs game theory and adverse selection setups to delve into the strategic decision-making processes of stakeholders in family firms. The authors break new ground by applying principal–agent theory (PAT) to family business governance structures. This innovative approach uncovers the determinants of the FP, enhancing the authors’ understanding of family firm dynamics.

The authors emphasize the importance of custom governance structures, such as the FP, in managing complex family-business interactions. These structures mitigate conflicts and promote smoother transitions during succession, ensuring family firm continuity. This study identifies key determinants, and these results will aid founders, families and practitioners in achieving smoother transitions, ensuring family firm continuity.

This research pioneers game theory and PAT applications in family business governance, shedding light on the effectiveness of customized governance mechanisms. By identifying FP determinants, the authors contribute to a deeper understanding of family firm dynamics. The findings have practical implications for founders, families, practitioners and consultants, promoting the long-term success and harmony of family firms in the global economy.