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Agent and stewardship behavior: How do they differ?

Published online by Cambridge University Press:  30 January 2017

John A. Martin  and
Frank C. Butler
John A. Martin*
Affiliation:
Department of Management and International Business, Wright State University, Dayton, OH, USA
Frank C. Butler
Affiliation:
Department of Management, College of Business, University of Tennessee – Chattanooga, Chattanooga, TN, USA
*
Corresponding author: [email protected]
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Abstract

The purpose of this study is examine how agency theory and stewardship theory lead to different firm-level outcomes on an array of different outcomes. Based on these differences, we argue for the development of an agent–steward measurement scale, which will help researchers classify chief executive officers (CEOs) along an agent–steward continuum. This, in turn, will spur research to predict and test CEO behaviors and firm-level outcomes. Agency theory suggests CEOs take advantage of their powerful positions to maximize their personal economic utility, whereas stewardship theory suggests CEOs are motivated through intrinsic awards and will balance their interests with those of other stakeholders. We use these theories to examine possible differences in CEO behaviors. This is important because different CEO behaviors might lead to differing impacts on important firm-level outcomes. This paper reviews the relevant agency and stewardship literatures, then offers propositions regarding CEO behaviors from agent and steward perspectives.

Keywords

agency theoryboard of directorsCEO behavior
Type
Research Article
Information
Journal of Management & Organization , Volume 23 , Issue 5 , September 2017 , pp. 633 - 646
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2017 

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