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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.

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.

The study aims to explore the theoretical bases justifying the use of performance-based financing (PBF) in the health sector in low- and middle-income countries (LMICs).

The authors conducted a scoping review of the literature on PBF so as to identify the theories utilized to underpin it and analyzed its theoretical justifications.

Sixty-four studies met the inclusion criteria. Economic theories were predominant, with the principal-agent theory being the most commonly-used theory, explicitly referred to by two-thirds of included studies. Psychological theories were also common, with a wide array of motivation theories. Other disciplines in the form of management or organizational science, political and social science and systems approaches also contributed. However, some of the theories referred to contradicted each other. Many of the studies included only casually alluded to one or more theories, and very few used these theories to justify or support PBF. No theory emerged as a dominant, consistent and credible justification of PBF, perhaps except for the principal-agent theory, which was often inappropriately applied in the included studies, and when it included additional assumptions reflecting the contexts of the health sector in LMICs, might actually warn against adopting PBF.

Overall, this review has not been able to identify a comprehensive, credible, consistent, theoretical justification for using PBF rather than alternative approaches to health system reforms and healthcare providers' motivation in LMICs.

The theoretical justifications of PBF in the health sector in LMICs are under-documented. This review is the first of this kind and should encourage further debate and theoretical exploration of the justifications of PBF.

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.

Construction projects have become increasingly long, complex and costly with waste and inefficiencies and often fail to achieve the desired results. Integrated project delivery (IPD) is believed to change these problems. A reasonable and fair profit distribution mechanism is a critical factor for ensuring the success of the IPD projects. This study aims to investigate the strategies of all participants in the profit distribution of an IPD project with respect to the factor of the effort level.

This study describes the influence of owners and participants on profit distribution due to their respective efforts in the IPD project alliance. The influence of effort level on profit distribution is discussed based on the Holmstrom-Milgrom model of asymmetric information game theory and principal-agent theory, combined with incentive compatibility (IC) constraints and individual rationality (IR) constraints.

The results show that the optimal level of effort by each participant optimizes the profit distribution of an IPD project. At the same time, in the revenue incentive contract, the effort level of the participants is positively correlated with the profit distribution, proportional to their contribution coefficient and inversely proportional to the square of the cost of their creative activities in terms of effort. Each party of an IPD project can adopt a series of measures to improve their own effort level and choose the optimal level of effort based on the profit distribution, while satisfying their own utility maximization.

This study introduces the Holmstrom-Milgrom model in the principal-agent theory to explore the influence of the effort level on profit distribution in IPD projects. The quantitative model can contribute to establish a fair and efficient profit distribution scheme for the IPD projects.

This chapter develops a theoretical account of higher education policy creation and the relationship between universities and the state. Through this process, it demonstrates the relevance of theories from political science – including policy analysis and parliamentary/legislative studies – to higher education policy analysis. The chapter outlines the enduring relevance of political factors in shaping higher education around the world and the different ways in which political and policy analysis can be positioned within higher education research. A series of theoretical frameworks are introduced including policy networks, neo-institutionalism and principal-agent theory. These theories account for how policy is made, the behaviour of universities and policy makers, and the dynamics within the relationship between universities and the state. The chapter explains how these approaches can be adapted and applied to higher education policy research, and how frameworks from political science can inform and enrich studies of higher education.

Although principal–agent theory has gained a prominent place in research, its negative image of self-serving managers is frequently criticized. Thus, the purpose of this paper is to examine how existing theories of agency and stewardship can be combined by using behavioral characteristics.

This study reviewed articles on the behavior of agents and stewards from the domains of finance, economics, management, corporate governance and organizational research. Additional theoretical and meta-analytical empirical literature from the fields of psychology and sociology was used to account for general patterns of human behavior.

The results indicate that goal congruency and the perception of fairness can serve as moderators distinguishing agency theory and stewardship theory. Goal congruency can be achieved by stipulating psychological ownership. The perception of distributive and procedural fairness is demonstrated by two major corporate governance mechanisms: performance-based compensation and board monitoring. The results are summarized in six hypotheses that allow a situational, customized corporate governance. These hypotheses can be tested in future research.

Prior work either focused on the merits of principal-agent theory or advocates the utilization of positive management theories, such as stewardship theory. However, little work has been done on bridging the gap between both constructs and develop a more extensive view of management theory.

Knowledge sharing is an important way to improve the knowledge system of industrial construction, and the supervision mechanism is an important way to improve the efficiency of knowledge sharing. However, some research works and practices indicate that the effects of applying the supervision mechanism are not obvious. Therefore, the purpose of this paper is to propose an incentive method of knowledge sharing based on the supervision mechanism for promoting knowledge sharing among member enterprises in the industrial construction supply chain.

A basic incentive model and an optimization model of knowledge sharing in the industrial construction supply chain based on the supervision mechanism were developed via the principal–agent theory. Weighted coefficients of explicit and implicit knowledge sharing were introduced into the basic model, while the supervision reward was added into the basic model of the optimization model. The effect of these two models was compared and analyzed via numerical simulation.

The optimal incentive coefficient and effort level of knowledge sharing can be obtained by solving the two aforementioned models. The results of the comparison between the two models indicate that the introduction of a supervisory reward improved the effort level and expected earnings produced by knowledge sharing, but reduced the confirmed equal earnings of member enterprises in the industrial construction supply chain.

Mutual transformation between tacit and explicit knowledge was not considered, and supervisory costs were also not considered, in the estimation of the output of knowledge sharing.

The new models proposed by this study provide theoretical guidance for the design of knowledge sharing incentive measures in the industrial construction supply chain based on the supervision mechanism. The findings suggest that member enterprises should pay attention to the costs of knowledge sharing, in order to obtain more benefits.

This study introduced the weight coefficients of explicit and implicit knowledge sharing into a previous incentive model, proposed an incentive optimization model of knowledge sharing in the industrial construction supply chain based on a supervisory mechanism, and revealed the change rules of related variables that affect the model with the change in weight coefficients. The findings verify the effectiveness of introducing supervisory reward measures and extend the range of theoretical application.

Grounded in the principal-agent theory, this study aims to develop and test hypotheses too, investigate how the firm’s strategic orientations, namely, innovation, growth, differentiation and cost leadership impact the chief information officer (CIO) reporting relationship and structure.

The study uses content analysis to analyze a data set of press releases collected from the LexisNexis Academic wire index. The press releases were issued by firms when they hired CIOs between 2003 and 2007, yielding 128 firms, which had specific information about the CIO reporting relationship and structure.

The results reveal that firms seeking an innovation, growth or differentiation strategy have their CIOs reporting to the chief executive officer.

The current study is motivated by the desire to replicate and extend the works of previous researchers who have assessed various CIO issues. Replication takes several forms such as the use of similar or different data sets, different research environments or reinvestigating research concepts through a different theoretical lens. This study makes use of a multi-firm data set spanning five years and the principal-agent theory as the theoretical framework to explore the CIO reporting relationship and structure. Although this study focuses on the hiring trends and the strategic orientations of the firms, future studies should explore other characteristics associated with the CIOs that might have an impact on the reporting relationship such as the years of experience, age, educational background of CIOs and information technology budgets.

The existing literature has not settled the debate as to whom the CIO should be reporting to and understanding the reporting relationships is important because, in many firms, the organizational structures and the reporting relationships are indicative of the power dynamics and how the organizational resources are controlled and shared.

Replication studies are important because they confirm, reinforce, extend and provide reliability to the paradigms and knowledge in the discipline, as well as offer reliability of the results upon which scientific progress is based.

This paper aims to examine different hypotheses concerning the effects of executive incentive on the degree of Chinese foreign direct investment (FDI) ambidexterity. Specifically, this study provides new insights on how executive equity incentive and executive control right incentive may affect overseas ambidextrous strategy of Chinese enterprises.

This study used panel data of Chinese manufacturing listed companies in 2006-2015 to explore the relationships between related factors. Hypotheses are tested by using regression analysis.

This study found that executive equity incentive is positively related to the degree of FDI ambidexterity. It also found that the level at which control right incentives of executive are made has a curvilinear relationship with degree of FDI ambidexterity. Higher level of control right incentive of executive will be associated with higher degree of FDI ambidexterity; however, beyond some level, higher control right incentive of executive will be associated with lower degree of FDI ambidexterity.

This paper has implications to future research and companies’ everyday practice on ambidextrous FDI strategy.

Based on the principal-agent framework and incentive theory, this paper offers an interesting insight of achieving balance of ambidextrous strategy for Chinese multinational enterprises by involving the different roles of executive equity incentive and executive control right incentive they played.