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Several explanations for the Royal African Company’s failure around the turn of the eighteenth century have been suggested. The paper argues that these reasons can be integrated into a more comprehensive account of the company’s failure through the introduction of a modified version of principal-agent theory. Instead of focusing on abstract, dyadic relationships, the paper proposes a model that accounts for the meaningful character of principal agent interactions and for the complex networks and multiple role identities of actors within those networks that comprised principal-agent relations within the company. On the basis of this model the failure of the company can be seen as a result of contradictions between its dual role as both agent and principal. The symbolic importance of inefficient trading practices helps to explain why the company was unable to pursue alternative strategies or otherwise benefit from its monopoly.

This chapter focuses on governance as a key element of the safeguarding system of the family enterprise. The management is in charge of the company’s performance in terms of profit and growth. The governance system is designed to secure value protection by designing a robust leadership system, monitoring and advising management, reviewing critical decisions, and providing fail-safe solutions in case of serious malfunctions of the management system. This chapter develops a typology of critical elements which could endanger the development of the company, including conflicts and disruptions among the owner group. Results of recent research on the root causes of the downfall of family enterprises are presented. Finally, a concept of a three-layer protection system is developed with the aim of providing stability for longevity.

The purpose of the paper is to investigate the inter‐ and intra‐organisational relationships in the commissioning of secondary care by primary care trusts in England, using a principal‐agent framework.

The methodology is a qualitative study of three case studies. A total of 13 commissioning‐related meetings were observed. In total, 21 managers and six consultant surgeons were interviewed.

There are a number of different levels at which contractual and managerial control take place. Different strengths of control at one level can affect willingness to comply with agreements at other levels. Agreements at one level do not necessarily result in appropriate or expected action at another.

The system for commissioning in the National Health Service (NHS) has changed with the introduction of payment by results and practice‐based commissioning. However, the dynamics of the inter‐ and intra‐organisational relationships studied remain.

Incentives within organisations are as important as those between organisations. Within a chain of principal‐agent relations, it is important that a strong link in the chain does not result in the exploitation of weaknesses in other links. If government targets and frameworks are to be met through commissioning, it may be advantageous to concentrate efforts on developing incentives that align clinician with NHS trust objectives as well as NHS trust with primary care trust (PCT) and government objectives.

This paper is based on original empirical work. It uses a principal‐agent framework to understand the relationships between PCTs and NHS trusts and highlights the importance of internal NHS trust governance systems in the fulfilment of commissioning agreements.

This paper attempts to study the impact of changing incentive strategies on enterprises' energy saving effort level and to construct an effective principal‐agent mechanism to achieve Pareto improvement of energy‐saving control.

Starting from the benefit relations between government and enterprises as well as their game strategies in energy conservation management, the impact of changing incentive strategies on enterprises' energy saving effort level and the asymmetric information situation of the players are studied taking into consideration the angle of strategies evolving in local government. Also, an effective principal‐agent mechanism to achieve Pareto improvement of energy‐saving control is constructed.

The results are convincing: interests of both the principal and agent had consistency under the principal‐agent mechanism, and the principal‐agent model was a mechanism with rich efficiency that could substantially arouse the enthusiasm of enterprises in energy saving. The comprehensive supervision of local governments over enterprises could effectually eliminate ill effects on energy‐saving management caused by information asymmetry under certain circumstances.

It is good for locating the balance of interest of game players by building a government energy saving mechanism based on principal‐agent theory. Through solving a game stable strategy, it is beneficial to seize a key point of regulation and control policies.

The paper succeeds in analyzing decision behaviours of government and enterprises through the basic idea of cooperative game theory so as to make actions of enterprises at all levels agree to government determined solving of energy issues.

Contemporary supply chain relationships inherently rely on delegation of work between organizations and, thus, are subject to agency problems for which a wide range of governance mechanisms exist. This review of agency theory (AT), across four distinct fields, explains the connection between governance mechanisms and supply chain relationship types.

The study uses a systematic literature review (SLR) of articles using AT in a supply chain context from the operations and supply chain management, general management, marketing, and economics fields.

The authors categorize the governance mechanisms identified to create a typology of agency relationships in supply chains.

The developed typology provides parsimonious theory on different forms of supply chain agency relationships and takes a step towards a “supply chain-oriented agency theory” explaining and predicting relationship types and governance in supply chains. Furthermore, a future research agenda calls for more accurate measuring of agency costs, to examine residual gains alongside residual losses, to take a dual-sided perspective of agency relations and to adopt AT to examine more complex supply networks.

The review provides a menu of governance mechanisms and describes situations under which these mechanisms could be deployed to guide managers when developing their supply chain relationships.

The first review to combine and elaborate views from four major disciplines using AT as a lens to supply chain relationships. Expanding the traditional set of governance mechanisms provides academics and practitioners with a bigger “menu” of options to consider.

Despite the increasing use of the agency perspective in studies of headquarters-subsidiaries relations in the multinational corporation (MNC), opponents fundamentally question its utility. In an attempt to contribute to this debate, we evaluate prior studies and develop considerations for future research. Our review of extant studies of headquarters-subsidiaries relations that make (explicit) use of the agency perspective reveals two significant shortcomings. First, we identify a need to validate the underlying assumptions when using the agency perspective in studies of headquarters-subsidiaries relations. Second, we detect a need to better account for the complex nature of headquarters-subsidiary relations in the MNC. A focus on these two areas can improve the use of the agency perspective and, ultimately, help resolve the contentious debate over the utility of the agency perspective.

Extant 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.

This 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.

Drawing 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.

The 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.

Classical assumptions of agency theory (AT) fall short of providing satisfactory answers to modern management and organizational knowledge (MOK) problems, and there is a need for extending the scope of the field. This article aims to compare modern AT assumptions with the agency perspective of Islamic historical political treatises (namely, siyasetnamas) and point out how AT can be furthered.

This article applies content analysis method to find out agency perspectives in Islamic political treatises and then compare them with those of the basic AT assumptions to find out similarities and differences between them in explaining agency problems.

The agency perspective in siyasetnamas are based on the following assumptions which could contribute to the development of AT with their emphasis on (1) responsibilities beyond contracts, (2) entrustment rather than ownership, (3) shared societal responsibility rather than conflicting individual interests, (4) importance of self-control for both principals and agents and (5) trust discourse which emphasizes inner virtues rather than control discourse.

Agency perspectives cannot be considered independent of cultural imprints. By introducing siyasetnamas' agency perspective, this article makes an effort to suggest implications for how to further modern MOK based overwhelmingly on individualistic cultural assumptions to rediscuss agency problems from the viewpoint of specifically the emerging markets in which collectivist culture plays an important role in social and economic life. In this respect, siyasetnamas' agency perspective based on the notion of entrustment seems, arguably, to be a better fit to the contextual realities and managerial practices of emerging markets.

The purpose of this paper is to explain the “evaluation deadlock” or “stasis” diagnosed by many authors. The explanation relies on a thought experiment.

The paper is conceptual and builds on a thought experiment inspired by qualitative research such as interviews with communication consultants in Sweden. It makes use of principal–agent theory and Akerlof’s theory of lemon markets.

A plausible explanation for the evaluation stasis requires consideration of practitioners’ self-interest as businesspeople. The deadlock is explained by an anomaly in practitioner populations and passive or active but covert resistance. If the long-time neglect of measurement and evaluation has led to expectation inflation and overpromising, even well-performing actors might shy away from rigorous measurement and evaluation practices in their own mandates, since they fear being measured against promotional, not realistic standards. At the same time, on the level of industry discourse, these practitioners would still advocate for measurement and evaluation in principle, so as to avoid the suspicion of underperformance.

The paper suggests an explanation for further empirical investigation. It does not attempt to demonstrate anything else than that the suggestion is plausible and that it warrants further investigation.

The scientific community engaged in the measurement and evaluation debate appears puzzled by the discrepancy between practitioners’ words and actions. The authors hope that the paper contributes to a more realistic and thus more constructive dialogue between practitioners and academics in the measurement and evaluation debate.

Inspired by Alvesson and Spicer’s concept of functional stupidity, the paper argues that attempts to explain the evaluation stasis have been marked by circumspection and narrowness. At present, explanations for the evaluation stasis tend to focus on lack of knowledge or inadequate systems or frameworks. The paper offers a more comprehensive explanation.

In this paper we develop a framework to assess the implications of information exchange within the complex setting of governmental budgeting. The framework draws on principal-agent relations and organizational learning, a perspective we call relational learning. Matching the agency’s style of learning with predominant patterns of information exchange (i.e., principal-agent relations-organizational networks and relationships), we construct a matrix of definable "relational learning" budget behaviors or models. Each model is associated with a pattern of information exchange recognizable to most budgeters, namely the budget process and budget contract. The models are presented as reasonable theoretical benchmarks for assessing budgeting practice and reforms.