Table I. Theoretical tenets and... | Emerald Publishing

Table I.

Theoretical tenets and applications of agency theory and stewardship theory

Characteristics	Agency theory	Stewardship theory
Main theme	Goal incongruence: assumes goal divergence based on self-interested rational actors. Initial disposition is to distrust. Control-oriented management philosophy. Theoretical assumptions are from economics	Goal alignment: mutual goals and objectives achieved through initial trust disposition. Involvement-oriented management philosophy. Theoretical assumptions derived from organizational behaviour, psychology and sociology
Theoretical tenets	Use of incentives and sanctions to foster goal alignment: Assign risk to the agent to ensure goal compliance Monitoring Reward systems Use of bonding threat to reputation	Empowers workers through: Responsibility Autonomy Shared culture and norms Personal power and trust Other governance mechanisms
Applications	Eliminate opportunistic behaviour Provide the level of incentives and sanctions to which reduce the threat of information asymmetry Correct, through specific contract requirements for asset specificity and moral hazard Uses reputation as an incentive and sanction Ensure goal alignment	Goal alignment based on shared goals and trust Reward workers through nonpecuniary mechanisms Reduces the threat of opportunistic behaviour through responsibility and autonomy Reduces the threat to the organization of information asymmetries, moral hazard and asset specificity Reduces dependence on legal contracts to enforce behaviour Uses reputation as an incentive and sanction

Characteristics	Agency theory	Stewardship theory
Main theme	Goal incongruence: assumes goal divergence based on self-interested rational actors. Initial disposition is to distrust. Control-oriented management philosophy. Theoretical assumptions are from economics	Goal alignment: mutual goals and objectives achieved through initial trust disposition. Involvement-oriented management philosophy. Theoretical assumptions derived from organizational behaviour, psychology and sociology
Theoretical tenets	Use of incentives and sanctions to foster goal alignment:Assign risk to the agent to ensure goal complianceMonitoringReward systemsUse of bonding threat to reputation	Empowers workers through:ResponsibilityAutonomyShared culture and normsPersonal power and trustOther governance mechanisms
Applications	Eliminate opportunistic behaviourProvide the level of incentives and sanctions to which reduce the threat of information asymmetryCorrect, through specific contract requirements for asset specificity and moral hazardUses reputation as an incentive and sanctionEnsure goal alignment	Goal alignment based on shared goals and trustReward workers through nonpecuniary mechanismsReduces the threat of opportunistic behaviour through responsibility and autonomyReduces the threat to the organization of information asymmetries, moral hazard and asset specificityReduces dependence on legal contracts to enforce behaviourUses reputation as an incentive and sanction

Source: Adopted from Van Slyke (2007, p. 167)