Towards a Stewardship Theory of Management

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Towards a Stewardship Theory of Management

• J. Davis
• F. Schoorman
• L. Donaldson

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Plan of the presentation

• Agency Theory
• Stewardship Theory
• Comparison of the two
• Conclusions and opinions
• Small Survey
• Question time

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Main Terms

• Focus on upper level managers
• Agent top manager (Agency Theory)
• Steward top manager (Stewardship Theory)
• Principal Company Owner in both theories

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Agency Theory

• Principal delegate authority to the agent
• Main goal for the agent and the principal
  maximizing own utility
• Agent maximizes his utility at the expense of the
  Principal
• Internal Controls of the agent by the principle
• Self-serving theory
• Interest directed by personal objectives

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Stewardship Theory

• Pro-organizational, collectivistic behavior
• Steward acts in the best interest of the company
• Meeting personal needs via organizational
• Empowerment rather than Control
• Risk involvement
• Interest directed by organizational objectives

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Extrinsic and Intrinsic Rewards

• Extrinsic - the most tangible
• (pay, benefits, promotion, special awards,
  status symbols)
• Intrinsic - less tangible
• (variety in job content, responsibility,
  recognition, autonomy, social interaction,
  opportunity for growth)

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Maslows hierarchy of human needs
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Agency vs Stewardship

• Psychological Factors

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Hofstedes dimensions of culture

• Power Distance
• (The degree of inequality)
• Individualism vs Collectivism
• (The way people act as members of the group)
• Masculinity vs Femininity
• (Traditional male or female values)
• Uncertainty Avoidance
• (Attitude to a risk)
• Long-term vs Short-term Orientation
• (The importance attached to the future versus the
  past and present )

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Agency vs Stewardship

• Situational Factors

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The choice between the theories

• Principals Choice
• Agent
  Steward
• Agent
• Managers Choice
• Steward

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Ways to deal with unwanted behavior of an agent

• Prevention-interest of managers must be aligned
  with interests of owners.
• Control-Board of directors. Independent of
  companys executive management.

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A companys success built on biblical principals

• True success is always built on service and
  commitment.
• Managers should cultivatea servants heart and
  a mindset of putting peoplefirst.

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Conclusion-stewardship and agent theories should
not be opposed to each other