This paper evaluates agency theory as a theory of performance outcome. Agency theory attributes uncertainty in performance outcomes to moral hazard, adverse selection and the state of nature. This paper argues that by overlooking two critical sources of outcome uncertainty in organizations — incomplete knowledge about the effort-outcome relationship and lack of agreement about effort and outcome — the generalizability of the theory is strictly limited. Even in such settings where it is generalizable, principal-agent approaches to contract design are unrealistic to the extent that they presume that performance in organizations results exclusively from individual-contributor jobs, exaggerate the degree to which individuals are work-averse, and emphasize the quantity of effort at the expense of the quality and type of effort. As a theory of performance, principal-agent approaches overstate the importance of operational effort and ignore the importance of facilitative effort such as team work.
Mark Fox is a doctrol student in the department of Managment, Univeristy of Canterbury, christchurch. New Zeland. V. Nilkant and R.T Hamilton are senior lecture and professor respectively in the same department. this paper is directed at those involved with family-owned business, families and busines which will inevitably face the stress of an inter generational transfer. The research lietrature is brought together to reveal the system of relationship through which such sucession must be mananged. suggestions fro improved managmement are offered and the paper concludes with a suggestion for the design of future research.
This study uses repertory grid interviews and a follow-up questionnaire study to develop a 'lay' theory of managerial effectiveness in a large New Zealand public sector organization. The lay theory is presented as a model with seventeen scales and two factors descriptive of effective and ineffective managers in the organization. The two factors indicate that effective and ineffective managers in the department are differentiated in terms of their conceptual, and interpersonal abilities. The effectiveness model shows strong similarity to models of effective management which have emerged in research outside New Zealand. This similarity is of particular interest given the context-specific nature of the study. The paper outlines the method used in the study, describes the key findings and discusses their implications for our understanding of managerial effectiveness.
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