We draw from legal theory to offer a fundamental rethinking of agency theory along three key dimensions: redefining the principal from shareholders to the corporation, redefining the status of the board from shareholders' agents to autonomous fiduciaries, and redefining the role of the board from monitors to mediating hierarchs. These dimensions contrast with classic agency theory, offering novel conceptions that can inform further theorization and empirical research in corporate governance.
The authors focus on the organ donation scene in Singapore and explore the range of marketing activities and responsibilities of the primary organ procurement agency in Singapore, the National Kidney Foundation. The authors examine Horton and Horton's (1991) model of willingness to become a potential organ donor and apply it with modifications to a sample of 368 multiracial Singapore residents. The authors find that, in addition to altruistic values and product knowledge, spiritual beliefs surrounding organ donation have an impact on a person's willingness to be a potential organ donor. The authors discuss implications for marketers and policymakers.
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.
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