Managing managed care: the enabling role of IS/IT

In their conceptualization of the principal/agent relationship, Jensen and Meckling were not referring to a knowledge worker (KW) agent. Agency theory is extended to the context of a KW agent to identify a key role for IS/IT in facilitating the monitoring function. To test this, the dynamics of a critical principal‐KW agent relationship in the health‐care industry are investigated. It is demonstrated that IS/IT goes beyond just alleviating the agency problem to enabling the KW agent to perform “self‐monitoring”. The results are significant for health care, agency relationships and the use of IS/IT with knowledge workers.