Applying evidence from recently available public information on Enron, I defined Enron’s culture as one rooted in agency theory by asserting that Enron’s members were predominantly agency-reasoning individuals. I then identified conditions present at Enron’s collapse: a strong agency culture with collectively non-compliant norms, a munificent rare-failure environment, and new hires with little business ethics training. Turning to four possible antidotes (selection, objectivist integrity, integrity capacity, and stewardship reasoning) to an agency culture under these conditions, (...) I argued that the currently available ethics literature would have made little difference toward averting Enron’s collapse if any of the recommendations from the relevant ethics literature had been implemented. I conclude by identifying new directions for business ethics literature in order to make it more implementable under the conditions identified at Enron. Essentially, we need a way to clearly determine (1) the difference between connivance and commitment, (2) what is meant by balance with regard to the multiple dimensions of ethics and legal theories, and (3) the proper balance between agency and stewardship reasoning. (shrink)

This study examines the influence of board independence on firm agency cost among listed firms in Bangladesh, which feature concentrated ownership and high insider representation on corporate boards. This study uses three measures of agency cost: the ‘expense ratio’, the ‘Q-free cash flow interaction’ and the ‘asset utilization ratio’. The finding of the study is that board independence can reduce the firm agency cost only under ‘asset utilization ratio’ measure of agency cost. These findings are robust (...) to several robustness tests. Furthermore, the non-linearity tests suggest that the benefit of outside independent directors is generally plausible as a factor controlling agency costs in the case of a medium level of board independence. Overall, these findings do not reject the validity of agency theory, supporting the Anglo-American orthodoxy promoting outside independent directors as good monitors. (shrink)

According to Streeck and Vogl, the neoliberalization of the state has been the result of political-economic developments that render the state dependent on financial markets. However, they do not explain the discursive shifts that would have been required for demoting the state to the role of an agent to bondholders. I propose to explain this shift via the performative effect of neoliberal agency theory. In 1976, Michael Jensen and William Meckling claimed that corporate managers are agents to shareholding (...) principals, which implied that their main task was the procurement of shareholder value. Agency theory subsequently prescribes a series of measures to ensure the alignment of principal and agent interests in corporations. The diffusion of agency theory, however, moved beyond corporate governance to reconfigure the state. Due to its reliance on capital markets, the state supposedly likewise becomes an agent of the investment public and should procure bondholder value. (shrink)

The purpose of this article is to examine two important issues concerning the agency theory of causality: the charge of anthropomorphism and the relation of simultaneous causation. After a brief outline of the agency theory, sections 2–4 contain the refutation of the three main forms in which the charge of anthropomorphism is to be found in the literature. It will appear that it is necessary to distinguish between the subjective and the objective aspect of the concept (...) of causation. This will lead, in section 5, to contrast two kinds of anthropomorphism, one which has been rightly rejected by modern science and one which is fully compatible with the objective reality of the causal processes. Finally, section 6 will apply the preceding considerations to simultaneous causation. On the one hand, in a basic sense, there can be no simultaneous causal relations. On the other hand, simultaneous causation arises when we consider the natural change by abstracting from the agent and from her/his projects of interven.. (shrink)

Some of the most salient features of Randolph Clarke's causal agent-causal theory of free action are explicated and his theory critiqued. It is shown that invoking agent-causation is unnecessary and makes his theory cumbersome. For insofar as Clarke seeks to render the agency theory more intelligible by appealing to event-causation as contributing to the generation of basic actions, his theory gravitates closer to a causal indeterminist theory of free action.

Price’s :157–176, 1991; 44:187–203, 1993 ; 2007, 2017) agency theory of causation has takes itself to provide a use-theory of our causal discourse. The theory’s aim is to describe the rules implicit to our linguistic behaviour when we describe things in causal terms. According to this theory, the rules governing our use of the concept of causation are based on our perspective as agents and our associated experiences of manipulating events. I argue that the observed (...) relation between agency and our concept of causation cannot exhaustively describe the conditions under which we enter into causal discourse. In particular, I demonstrate that the agency theory faces familiar problems with accounting for causal ascriptions to token cases. (shrink)

The use of agency theory remains highly controversial among business ethicists. While some regard it as an essential tool for analyzing and understanding the recent spate of corporate ethics scandals, others argue that these scandals might not even have occurred had it not been for the widespread teaching of agency theory in business schools. This paper presents a qualified defense of agency theory against these charges, first by identifying the theoretical commitments that are essential (...) to the theory (in order to distinguish between agency theory itself and certain incorrect interpretations that have been widely promulgated), and second, by specifying more clearly the different ways that agency theory can be used to analyze relations within the firm. The recommendation that follows from this analysis is that agency theory be used as a critical-diagnostic tool, to identify the points at which both firms and markets will be vulnerable to breakdown in the absence of moral constraint. (shrink)

A shift in the cultural conception of the firm as productionsystem to that as investment-system entrenches the institutional logic of agency theory in governance reform. Reform initiatives emphasize the separation between management and the board, forensic reporting requirements, and the primacy of shareholders' entitlement to control and residual gains. Problems associated with this agency logic render reform unable to deliver a broad-based ethical operating environment. The introduction of a version of stakeholder theory, augmented by Knightian uncertainty, (...) places the development of an alternative conception of the firm into discourse. Implications for governance reform are considered. (shrink)

Standard accounts on the nature of the firm are highly dependent on explanations by Coase, coupled with inputs from agency theory and shareholder theory. This paper carries out their critique in light of personalist and common good postulates. It shows how personalist and common good principles create a framework that not only accommodates business ethics better but also affords a more compelling understanding of business as a whole.

Agency theory involves what is known as the principal-agent problem, a topic widely discussed in economics, management, and business ethics today. It is a characteristic of nearly all modern business firms that the principals (the owners and shareholders) are not the same people as the agents (the managers who run the firms for the principals). This creates situations in which the goals of the principals may not be the same as the agents--the principals will want growth in profits (...) and stock price, while agents may want growth in salaries and positions in the hierarchy. The fourth volume in the Ruffin Series in Business, this book explores the ethical consequences of agency theory through contributions by ethicists, economists, and management theorists. (shrink)

The Assumption of Agency Theory Content Type Journal Article Category Review Pages 523-528 DOI 10.1558/jcr.v11i4.523 Authors Kathrine Elizabeth Anker, Planetary Collegium, Plymouth University, Drake Circus, Plymouth, Devon PL4 8AA, UK Journal Journal of Critical Realism Online ISSN 1572-5138 Print ISSN 1476-7430 Journal Volume Volume 11 Journal Issue Volume 11, Number 4 / 2012.

Ward concludes that either the natural-agency account is not a genuine alternative to Hume, because it tacitly accepts or presupposes what Hume said, or, if it is an alternative, it is not a viable one, because at the very point where it departs from Hume’s account, it asserts something “mysterious.” The gist of my reply will be to assert, first, that the position I wish to defend flatly contradicts some of Hume’s key claims, so there can be no question (...) of my having tacitly accepted them; and second, that, where Ward finds the position unacceptable, it is apparently because he has so thoroughly absorbed certain basic Humean assumptions that his arguments beg the question against any alternative to Hume. (shrink)

IN the recent past there has been a resurgence of interest in the work of Thomas Reid; several new editions of his work have appeared as well as a series of articles concerning various aspects of his systematic philosophy. Interest has generalized to the whole Scottish tradition, including numerous figures in the history of American philosophy who were deeply influenced by Reid and Dugald Stewart. In addition, several recent and contemporary philosophers have used Reid's epistemic views as a point of (...) departure in developing their own adverbial theories of sensing and appearing. Others have used Reid's theory of agency in formulating their own views on freedom and responsibility. (shrink)

The Assumption of Agency Theory revisits the Turing Test and€examines what Turing's assessor knew. It asks important questions about how machines vis à vis humans have been characterized since Turing, and seeks to reverse the trend of looking closely at the machine by asking what humans know in interaction and how they know it.€This book€characterizes a non-human agent that shows itself in interaction but is distinct from human agency: an agent acting with us in our ongoing reproduction (...) and transformation of structure. Turing predicted that at the end of the twentieth century, w. (shrink)

This book explores and critically reflects on the theory and practice of political agency in contemporary global politics. In light of the changing relationship between the state, the market and the society, it seeks to map both theoretically and empirically contemporary forms of global political agency. This book reflects on the theory and practice of political agency in contemporary global politics. More specifically, it empirically analyses a range of different forms of political agency and (...) explores their significance for understanding and enacting global politics. Reflecting the efforts of scholars from a variety of disciplines from political theory and Sociology to Geography and International Relations, it brings into conversation a wide spectrum of theoretical approaches including Marxism, feminism, post-structuralism and historical institutionalism. The contributors compare a range of forms of political agency; exploring their significance for the theory and practice of global politics; and reflect on the tensions and synergies generated by recent efforts to conceptualise them.Demonstrating an innovative and interdisciplinary approach Contemporary Political Agency will be of interest to students and scholars of international relations, sociology, political economy and political theory. (shrink)

This paper explores the historical American political values which have shaped modern financial theory and agency theory. Financial agency theory's intellectual roots are shown to be located in the liberal tradition which espouses the instrumental nature of property and property rights. The paper also argues that financial theorists should recognize that, historically, economic efficiency was not a value or end in itself but merely a means by which more fundamental social goals might be achieved.

This article aims to apply the model of change agent to the interpretation of Colossians. Presuming a continuity between Jesus and Paul, the article introduces the concept of ‘by faith alone’ from the Pauline letters. By this expression is meant an undivided fidelity to an inclusive approach to understanding God’s work, with concrete historical roots in Jesus’ crossing of gender, ethnic and cultural boundaries. Living in this manner requires reformation, transformation and change. The study spells out in fuller detail what (...) is understood ‘by faith alone’ by discussing the meaning of ‘faith’ within its semantic domain embedded in the codes of 1st-century Mediterranean culture. Living in faith is both a change of one’s inner convictions and about a life in faith. (shrink)

As rational choice theory has moved from economics into political science and sociology, it has been dramatically transformed. The intellectual diffusion of agency theory illustrates this process. Agency theory is a general model of social relations involving the delegation of authority, and generally resulting in problems of control, which has been applied to a broad range of substantive contexts. This paper analyzes applications of agency theory to state policy implementation in economics, political science, (...) and sociology. After documenting variations in the theory across disciplinary contexts, the strengths and weaknesses of these different varieties of agency theory are assessed. Sociological versions of agency theory, incorporating both broader microfoundations and richer models of social structure, are in many respects the most promising. This type of agency theory illustrates the potential of an emerging sociological version of rational choice theory. (shrink)

This book explains psychological, sociopolitical and organisational change in multidisciplinary settings. It shows how advanced techniques of contextual analysis can be applied to complex situations and offers a new cybernetic agency paradigm based on living systems theory. It models, diagnoses, and analyses complex, realworld situations to anticipate patterns of behaviour.

In a previous article, I argue that on the assumption that God exercises libertarian agency, a primary causal divine miracle could, in principle, leave a scientifically detectable gap in the natural world. In a subsequent publication, Evan Fales offered a critique of my argument and this article is my rejoinder. I justify my employment of Divine libertarian agency and respond to Fales’s two, closely-related questions: How much energy could one add to a room by making a lot of (...) decisions? Would the increase in energy be measurable? (shrink)

In recent years executive coaching has become an important management development practice in many organizations. Executive coaching is a partnership between a management level client and a coach hired by an organization to assist the executive in becoming a more effective and successful manager. While executive coaching has become a frequent and important practice in organizations, there has been relatively little serious consideration of the complex ethical issues that arise for persons and organizations. This study proposes that executive coaching involves (...) an agency relation with specific moral duties that go beyond the usual standards of professional ethics. Agency theory, and in particular a focused understanding of the agency relationship, can provide a needed ethical grounding and basis for moral thinking about executive coaching. (shrink)

Theory and language: locating agency between free will and discursive marionettesThis article outlines a research methodology that embraces individual narratives, yet recognizes that individual narratives are nested within a backdrop of broader social and cultural understandings of who we are and how we come to understand our world. This dialectical move requires an epistemological shift, focusing on the utility of reconceptualizing the ‘environment’, not only as the social, political, or economic conditions in society, but also as language. Reconceptualizing (...) the environment as language makes it epistemologically possible to construct a bridge between varying levels of analysis, namely, between individual accounts and life stories and the cultural, social, and historical worlds from which those accounts emerge. (shrink)

The conflict between agency and stakeholder theories of the firm has long been entrenched in organizational and management literature. At the core of this debate are two competing views of the firm in which assumptions and process contrast each other so sharply that agency and stakeholder views of the firm are often described as polar opposites. The purpose of this paper is to show how agency theory can be subsumed within a general stakeholder model of the (...) firm. By analytically deconstructing the assumptions of agency theory, it is argued that agency theory: (1) must include a recognition of stakeholders; (2) requires a moral minimum to be upheld, which places four moral principles above the interests of any stakeholders, including shareholders; (3) consists of contradictory assumptions about human nature and which give rise to the equally valid assumptions of trust, honesty and loyalty to be infused into the agency relationship. In this way, stakeholder theory is argued to be the logical conclusion of agency theory. Empirical hypotheses are presented as a means to substantiate this claim. (shrink)

ABSTRACT:Some business ethicists view agency theory as a cautionary tale—a proof that it is impossible to carry out successful economic interactions in the absence of ethical behaviour. The cautionary-tale view presents a nuanced normative characterisation of agency, but itsunilateralfocus betrays a limited understanding of the structure of social interaction. This article moves beyond unilateralism by presenting a descriptive and normative argument for abilateralcautionary-tale view. Specifically, we discuss hat swaps and role dualism in asymmetric-information principal-agent relationships and argue (...) that the norm of reciprocity can function as a moral solution to agency risks in adverse-selection and moral-hazard problems. Our bilateral cautionary-tale formulation extends the normative boundaries of agency theory, while leaving the fundamental economic assumptions of agency theory intact. (shrink)

Developments along various epistemic fronts have been gradually modifying our ethical conception of what constitutes agency. For several reasons, we should acknowledge in particular that there is an irremediably ecological character to moral action, in a number of respects. After providing a broad analysis of the ecological turn in moral theory, I reflect on some of its implications for our understanding of the historicity of morals. I then comment on ways in which the field of comparative religious ethics (...) can enrich this emergent account of ecological agency, and vice versa. (shrink)

This paper studies the relationship between personal stock donation by top executives and board of directors (insiders) of publicly traded corporations and their personal tax, shareholders' returns, and social responsibility. The study finds evidence that the timing of stock donations is driven by personal tax gain. The study further shows, comparing stock gift corporations relative to their non-stock gift cohorts, that personal stock gifts are associated with lower short-term and long-term stock returns to shareholders. This implies that stock donation driven (...) by insiders' personal gain adversely affects shareholder wealth. However, the likelihood and intensity of insiders to make personal stock donation is reduced when firms have strong corporate social responsibility (CSR). Agency theory explains insiders' opportunistic behavior, stakeholder theory is also supported by evidence that stock donation is negatively related to CSR, and stewardship theory offers a different view to explain the rationale behind insiders' stock donation and shareholders' reactions to stock gifts. (shrink)

The spectacular corporate scandals and bankruptcies of the past decade have served as a powerful reminder of the risks that are involved in the ownership of enterprise. Unlike other patrons of the firm, owners are residual claimants on its earnings.1 As a result, they have no explicit contract to protect their interests, but rely instead upon formal control of the decision-making apparatus of the firm in order to ensure that their interests are properly respected by managers. In a standard business (...) corporation, it is the shareholders who stand in this relationship to the firm. Yet as the recent wave of corporate scandals has demonstrated once again, it can be extraordinarily difficult for shareholders to exercise effective control of management, or more generally, for the firm to achieve the appropriate alignment of interests between managers and owners. After all, it is shareholders who were the ones most hurt by the scandals at Enron, Tyco, Worldcom, Parmalat, Hollinger, and elsewhere. For every employee at Enron who lost a job, shareholders lost at least US$4 million.2 Furthermore, employees escaped with their human capital largely intact. Creditors and suppliers continue to pick over the bones of the corporation.3 But as far as shareholders are concerned, their investments have simply evaporated, beyond any realistic hope of retrieval. (shrink)

Two theories dominate the current debate on group agency: functionalism, as endorsed by Bryce Huebner and Brian Epstein, and interpretivism, as defended by Deborah Tollefsen, and Christian List and Philip Pettit. In this paper, I will give a new argument to favour functionalism over interpretivism. I discuss a class of cases which the former, but not the latter, can accommodate. Two features characterise this class: First, distinct groups coincide, that is numerically distinct groups share all their members at all (...) time. Second, we have access to the inner mechanisms of the groups agents, because members know what they have decided on. I construct a counterexample with these features allowing me to reject interpretivism about group agency in favour of functionalism. (shrink)

The paper distinguishes versions of the 'Agency theory of causation' and defends some of them against the charge of circularity.

Much contemporary work on agency offers only a partial account because it remains within an essentially negative understanding of subject formation. This essay examines the work of Judith Butler and Drucilla Cornell and argues that the negative paradigm needs to be supplemented by a more generative theoretical framework, if feminists are to develop a fuller account of agency. In the negative paradigm, the subject is understood in passive terms as an effect of discursive structures. This tends to overlook (...) ideas of self-interpretation that introduce more active dimensions into understandings of subject formation and agency. Furthermore, an unqualified notion of indeterminacy does not unpick the imbrication of relations of time and power that overdetermine agency. Ultimately, structural accounts of subject formation need to be integrated more closely with hermeneutic perspectives of the self in order to understand better the complexities of agency in a post-traditional society. (shrink)

The causal theory of action has been the standard view in the philosophy of action and mind. In this chapter, I will present responses to two challenges to the theory. The first says, basically, that there is no positive argument in favour of the causal theory, as the only reason that supports it consists in the apparent lack of tenable alternatives. The second challenge says that the theory fails to capture the phenomenon of agency, as (...) it reduces activity to mere happenings (events and event-causal processes). This is often referred to as the problem of "disappearing agency". My main aim is to show that there is no problem of disappearing agency, and we will see that my response to the first challenge will be conducive to this end. I will present a positive argument for the causal theory on the basis of considerations concerning the metaphysics of agency, and I will suggest that we "own" the agency that springs from our mental states and events "by default". (shrink)

My dissertation consists of two main parts. In the first part, I begin by assuming the plausibility of the libertarian thesis that agents sometimes could have done otherwise than they did given the very same history of the world. In light of this assumption, I undertake to develop a model of agency which does not employ the concept of agent-causation. My agency theory is developed in three main stages: I suggest that any agency theory must (...) satisfy four desiderata: It must adequately account for the freedom and responsibility of human agents. It must provide an adequate answer to the question of what distinguishes human actions from mere happenings. It must adequately account for the epistemological fact that human agents have an immediate and nonobservational awareness of their actions. It should have the support of a respectable philosophical tradition. I argue that agent-causation provides a theory of agency which fails adequately to satisfy these four desiderata. I claim both that human actions are uncaused exercisings by agents of their powers and that human agents typically act for reasons. I maintain that the central issue dividing agency theorists and nonagency theorists is whether reasons for performing actions cause the latter. I maintain that the sense of 'because' in 'I did x because...' is not causal in nature, but teleological. ;Having developed my model of agency, in the second part of my dissertation I investigate what are some of the paradigmatic actions human agents perform. I claim that bodily actions, such as moving an arm, are psychological in nature. Essential to my argument is the concept of a body-image. A normal agent 'feels' as if she is present in her physical arm. The way a normal agent feels is revealed in the case of a phantom limb. The subject of a phantom arm feels as if her amputated physical arm is still there and she can move while feeling armishly. I maintain that the bodily action of moving an arm is the agent's movement as a psychological arm-image of her physical arm, whether the physical arm is present or not. (shrink)

introduction to the model of human agency -- Human agency -- Circle within a circle -- Communication over intervention -- Objective function -- Economic resources -- Resource allocation -- Risk, returns & rewards -- Risk aversion -- Individual investment -- Organization investment -- The law of proportion -- Heart capital -- Heart labor -- Territory -- Information asymmetry -- Monitoring and bonding -- Testing.

All theory makes assumptions about the nature of reality (either implicitly or explicitly) and such ontological assumptions necessarily regulate how one studies the things and events under investigation. Successful study is inex- tricably dependent upon an adequate ontology. As Bryant neatly puts it, "Effective application, in turn, is connected with adequate working assumptions about the constitution of society. Argument about the constitution of society is thus not a recondite activity which most sociologists [and organi- sation theorists] can safely ignore" (...) (1995: 58, interpolation added). The central concern in this paper is with the ontological underpinnings of much of the current literature in organisation studies in respect of struc- ture and culture. It will be argued that conflation of irreducible and causally-efficacious strata of social reality in the shape of social structure and culture permeates much of the current literature, thus rendering analysis of the interplay between them and their relationship with human agency diffi- cult to elucidate. The ontological underpinnings of organisational analysis have arguably turned full circle from the depth of social reality acknowl- edged by functionalism, structural Marxism and systems theory to the generic endorsement of Giddens’ structuration theory. As will be argued, Giddens’ theory entails a depthless ontology, which necessarily precludes methodological prescription. (shrink)

The conflict between agency and stakeholder theories of the firm has long been entrenched in organizational and management literature. At the core of this debate are two competing views of the firm in which assumptions and process contrast each other so sharply that agency and stakeholder views of the firm are often described as polar opposites. The purpose of this paper is to show how agency theory can be subsumed within a general stakeholder model of the (...) firm. By analytically deconstructing the assumptions of agency theory, it is argued that agency theory: (1) must include a recognition of stakeholders; (2) requires a moral minimum to be upheld, which places four moral principles above the interests of any stakeholders, including shareholders; (3) consists of contradictory assumptions about human nature and which give rise to the equally valid assumptions of trust, honesty and loyalty to be infused into the agency relationship. In this way, stakeholder theory is argued to be the logical conclusion of agency theory. Empirical hypotheses are presented as a means to substantiate this claim. (shrink)

Gavin Rae shows that the problematic status of agency caused by the poststructuralist decentring of the subject is a central concern for poststructuralist thinkers. He shows how this plays out in the thinking of Deleuze, Derrida and Foucault, and find the best explanation of agency for the founded subject in the work of Castoriadis.

This book reassesses theories of agency and gender identity against the backdrop of changing relations between men and women in contemporary societies.