The Problem Of Agency Theory
Ever heard of agency theory? It’s basically how people explain out the various relationships at work, with the primary actors being “shareholders” and “company executives.” I think the former is principals and the latter is agents. You could probably fill a library with all the things I don’t really know about finance. Anyway.
Here’s the problem with this whole agency theory deal. It ties directly into the “Stakeholders Problem.” That one applies to rank and file employees too. Basically, on every project, you have all these stakeholders. There’s the main manager, but probably a few other bosses too. And then there’s always someone managing all the assets who keeps hitting you about deadlines. Then your stakeholders have stakeholders — i.e. their bosses — and eventually every move is seemingly being analyzed by 19 different people.
What I just described shouldn’t be normative, but it’s the closest definition most of us have to “What is work, really?” That and “chimp rape.”
And now we’ll add another piece to this whole messy little puzzle.
Agency theory in a HBR cover story
Nice title on this one: “The Error At The Heart Of Corporate Leadership.” I can count like 22 such errors, but I’m interested to see what the article says…
