Integrating agency theory and stewardship theory into family business research – Based on literature analysis
DOI:
https://doi.org/10.15170/MM.2022.56.04.02Keywords:
ageny theory, stewardship theory, family business, manager entrenchmentAbstract
THE AIMS OF THE PAPER
The aim of the study is to summarize the most important findings of two scientific theories, agent theory and stewardship theory based on literature review, which have had a great influence on the theoretical research on family businesses. Another goal is to provide specific family business examples of how the elements of the two theories can be realized in practice.
METHODOLOGY
The method used is a review of the international and Hungarian literature dealing with agency theory and stewardship theory, as well as the adaptation of the two theories to family businesses, supplemented by a summary of practical examples typical of the main elements of the two theories in firms that can be identified as family businesses based on the definitional criteria.
MOST IMPORTANT RESULTS
The most important result of the study is that it reviews the characteristics of the family business in an even less studied field within the Hungarian literature, the agent theory and the stewardship theory, with the help of practical examples. One of the fundamentals of agent theory is that agency costs arise due to the nature of the relationship between the principal (owner) and the agent (manager). The theoretical findings of the study can contribute to the understanding of what situations can result in agency costs and how they can be reduced. The present examination does not touch on all aspects of the two theories and does not cover the empirical justification of the theoretical conclusions.
RECOMMENDATIONS
A better understanding of the ownership and management patterns of family businesses can be facilitated by examining how the relationships between the owner and manager of the family business can typically be described, and what owner-manager relationship may be optimal for a family business. The findings can serve as a starting point in practice for family businesses in deciding the strategic question of what management structure is better suited to the business, what is preferable if the leader is an agent-manager or a steward-manager.
References
Ács, G. (2016), BioTechUSA by Lévai testvérek. Forbes, (2), 20–26.
Anderson, R. C., & Reeb, D. M. (2003), Founding-Family Ownership and Firm Performance: Evidence from the S&P 500. Journal of Finance, 58(3), 1301–1327. https://doi.org/10.1111/1540-6261.00567
Bánáti, A. (2020), Ladó papa, próbáld meg a tengeri kajakot! Forbes, (2), 35–38.
Bánáti, A., & Tima, D. (2018), Száz év, három vezető. Forbes, (Különszám), 19–21.
Baros-Tóth, Á. (2022a), A családi vállalkozások hosszú élettartamának esélyei az évszázados japán családi vállalkozások tükrében. Tudásmenedzsment, 23(1), 155–167. https://doi.org/https://doi.org/10.15170/tm.2022.23.1.10
Baros-Tóth, Á. (2022b), Mi is az a családi vállalkozás? - A családi vállalkozások meghatározásának problematikája. Tudásmenedzsment, 23(2), 68–81. https://doi.org/10.15170/TM.2022.23.2.6
Becsky-Nagy, P., & Fazekas, B. (2015), Speciális kockázatok és kockázatkezelés a kockázatitőke-finanszírozásban. Vezetéstudomány, 46(3), 57–68.
Cano-Rubio, M., Fuentes-Lombardo, G., & Vallejo-Martos, M. C. (2017), Influence of the lack of a standard definition of “family business” on research into their international strategies☆. European Research on Management and Business Economics, 23(3), 132–146. https://doi.org/10.1016/j.iedeen.2016.10.002
Chrisman, J. J., Chua, J. H., Kellermanns, F. W., & Chang, E. P. C. (2007), Are family managers agents or stewards? An exploratory study in privately held family firms. Journal of Business Research, 60(10), 1030–1038. https://doi.org/10.1016/j.jbusres.2006.12.011
Chrisman, J. J., Chua, J. H., & Sharma, P. (2005), Trends and Directions in the Development of a Strategic Management Theory of the Family Firm. Entrepreneurship Theory & Practice, 29(5), 555–575. https://doi.org/https://doi.org/10.1111/j.1540-6520.2005.00098.x
Chua, J. H., Chrisman, J. J., & Sharma, P. (1999), Defining the family business by behavior. Entrepreneurship: Theory and Practice, 23(4), 19–39.
Davis, J. H., Schoorman, F. D., & Donaldson, L. (1997), Toward a stewardship theory of management. Academy of Management Review, 22(1), 20–47.
De Massis, A., Sharma, P., Chua, J. H., & Chrisman, J. J. (2012), Family Business Studies: An Annotated Bibliography. Northampton: Edward Elgar Publishing Inc.
Donaldson, L. (1990), The Ethereal Hand : Organizational Economics and Management Theory. Academy of Management Review, 15(3), 369–381. https://doi.org/https://doi.org/10.5465/amr.1990.4308806
Donaldson, L., & Davis, J. H. (1991), Stewardship Theory or Agency Theory: CEO Governance and Shareholder Returns. Australian Journal of Management, 16(1), 49–64. https://doi.org/https://doi.org/10.1177/031289629101600103
Eisenhardt, K. M. (1989), Agency Theory : An Assessment and Review. Academy of Management Review, 14(1), 57–74. https://doi.org/https://doi.org/10.2307/258191
Farkas, G., & Málovics, É. (2021), A gondoskodó elmélet megjelenése a családi vállalkozásokban. Vezetéstudomány / Budapest Management Review, 52(11), 45–56. https://doi.org/10 .14 26 7
Gamble, J. E. (2000), Management commitment to innovation and ESOP stock concentration. Journal of Business Venturing, 15(5–6), 433–447. https://doi.org/https://doi.org/10.1016/S0883-9026(99)00037-3
Horváth, K. (2016), Szimbiotikus és parazita pénzkímélő technikák a hazai kkv-k körében. Marketing & Menedzsment, 50(1), 36–52. Retrieved from https://journals.lib.pte.hu/index.php/mm/article/view/910
Jensen, M. C., & Meckling, W. H. (1976), Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.4159/9780674274051-006
Kallmuenzer, A. (2015), Agency Theory and the Family Business. In M. Nordqvist, L. Melin, M. Waldkirch, & G. Kumeto (Eds.), Theoretical perspectives on family businesses (pp. 58–77). Cheltenham: Edward Elgar Publishing. https://doi.org/https://doi.org/10.4337/9781783479665.00011
Kása, R., Radácsi, L., & Csákné Filep, J. (2017), Családi vállalkozások Magyarországon. BGE Budapest Lab Working Paper Series, (4), 1–28.
Kassai, Á. (2020), Vállalkozói vezetői kompetenciák a Hangavári Pincészet esete tükrében. Marketing & Menedzsment, 54(1), 75–89. https://doi.org/10.15170/mm.2020.54.01.07
Konczosné Szombathelyi, M., & Kézai, P. (2018), Családi vállalkozások – generációk és dilemmák 1. Prosperitas, 5(3), 48–76.
Kováts, G. (2018), A sokszínű bizalom. Educatio, 27(4), 531–547. https://doi.org/10.1556/2063.27.2018.001
KPMG and EFB. (2015), Fourth European Family Business Barometer. 4th, 1–32.
Litz, R. A. (1995), The Family Business: Toward Definitional Clarity. Family Business Review, 8(2), 71–81. https://doi.org/10.1111/j.1741-6248.1995.00071.x
Löhde, A. S. K., Campopiano, G., & Calabrò, A. (2021), Beyond agency and stewardship theory: shareholder–manager relationships and governance structures in family firms. Management Decision, 59(2), 390–405. https://doi.org/10.1108/MD-03-2018-0316
Lukács, E. (2005), A vállalatelméletek meghatározó csoportja - A magatartási elméletek. Gazdaságtudományi Közlemények, 4(1), 35–49.
Madison, K., Holt, D. T., Kellermanns, F. W., & Ranft, A. L. (2016), Viewing Family Firm Behavior and Governance Through the Lens of Agency and Stewardship Theories. Family Business Review, 29(1), 65–93. https://doi.org/10.1177/0894486515594292
Madison, K., Kellermanns, F. W., & Munyon, T. P. (2017), Coexisting Agency and Stewardship Governance in Family Firms: An Empirical Investigation of Individual-Level and Firm-Level Effects. Family Business Review, 30(4), 347–368. https://doi.org/10.1177/0894486517727422
Málovics, É., & Farkas, G. (2016), A „ családiság ” tényező vizsgálata grounded theory módszerrel . Egy kis családi vállalkozás esetpéldája. In I. Lengyel & B. Nagy (Eds.), Térségek versenyképessége, intelligens szakosodása és újraiparosodása (pp. 370–384). Szeged: JATEPress,.
Mandl, I. (2008), Overview of Family Business Relevant Issues Contract No . 30-CE-0164021 / 00-51 Final Report. (30), 1–175.
Marvel, M. (2013), Family Business: Stewardship. Encyclopedia of New Venture Management, (June). https://doi.org/10.4135/9781452218571.n74
Payne, G. T. (2020), Family Business Review in 2020: Focus on the Family. Family Business Review, 33(1), 6–9. https://doi.org/10.1177/0894486520904460
Ross, S. (1973), The economic theory of agency: The principal’s problem. The American Economic Review, 63(2), 134–139.
Rovelli, P., Ferasso, M., De Massis, A., & Kraus, S. (2021), Thirty years of research in family business journals: Status quo and future directions. Journal of Family Business Strategy. https://doi.org/10.1016/j.jfbs.2021.100422
Sharma, P., Chrisman, J. J., & Chua, J. H. (1997), Strategic management of the family business: Past research and future challenges. Family Business Review, 10(1), 1–35. https://doi.org/10.1111/j.1741-6248.1997.00001.x
Sharma, P., Chrisman, J. J., & Gersick, K. E. (2012), 25 Years of Family Business Review: Reflections on the Past and Perspectives for the Future. Family Business Review, 25(1), 5–15. https://doi.org/10.1177/0894486512437626
Shukla, P. P., Carney, M., & Gedajlovic, E. (2014), Economic theories of family firms. In L. Melin, M. Nordqvist, & P. Sharma (Eds.), The SAGE Handbook of Family Business (p. 671). London: SAGE Publications Ltd. https://doi.org/https://dx.doi.org/10.4135/9781446247556
Songini, L., & Gnan, L. (2015), Family Involvement and Agency Cost Control Mechanisms in Family Small and Medium-Sized Enterprises. Journal of Small Business Management, 53(3), 748–779. https://doi.org/10.1111/jsbm.12085
Vajda, É. (2020), A bizalom szerepe a családi vállalatokban = Role of Trust in Family Businesses. Köz-Gazdaság, 15(3), 106–118. https://doi.org/10.14267/retp2020.03.10
Yu, A., Lumpkin, G. T., Sorenson, R. L., & Brigham, K. H. (2012), The Landscape of Family Business Outcomes: A Summary and Numerical Taxonomy of Dependent Variables. Family Business Review, 25(1), 33–57. https://doi.org/10.1177/0894486511430329
Zahra, S. A., Hayton, J. C., Neubaum, D. O., Dibrell, C., & Craig, J. (2008), Culture of family commitment and strategic flexibility: The moderating effect of stewardship. Entrepreneurship: Theory and Practice, 32(6 SPEC. ISS.), 1035–1054. https://doi.org/10.1111/j.1540-6520.2008.00271.x
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 The Hungarian Journal of Marketing and Management
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
