Stewardship Theory

Question 1

What is the main theme of stewardship theory?

Answer 1

Goal Alignment: Mutual goals and objectives achieved through initial trust disposition. Involvement oriented management philosophy. Theoretical assumptions derived from organizational behavior, psychology, and sociology.

Question 2

What is the main theme of Agency Theory?

Answer 2

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.

Question 3

What are the theoretical tenets of Agency theory?

Answer 3

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

Question 4

What are the theoretical tenets of Stewardship theory?

Answer 4

Empowers workers through

• Responsibility
• Autonomy
• Shared culture and norms
• Personal power and trust
• Other governance mechanisms

Question 5

What are the applications of agency theory?

Answer 5

• Eliminate opportunistic behavior
• Provide the level of incentives and sanctions 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

Question 6

What are the applications of stewardship theory?

Answer 6

• Goal alignment based on shared goals and trust
• Reward workers through non-pecuniary mechanisms
• Reduces the threat of opportunistic behavior through autonomy and responsibility
• Reduces the threat to the organization of information asymmetric moral hazard, and asset specificity
• Reduces dependence on legal contracts to enforce behavior

Question 7

The use of what influence the manner in which contract relationships are managed?

Answer 7

Trust, Reputation, and Monitoring

Question 8

What are the contextual conditions that mediate how a non-profit is managed over time from a principal-agent to a principal-steward deal?

Answer 8

1. ) Type of Service
2. ) Lack of Market Competitiveness
3. ) Management Capacity Constraints

Question 9

What is the most frequent form of privatization in the U.S.?

Answer 9

Contracting with a third party for the production of goods and provision of services

Question 10

How has stewardship theory been framed?

Answer 10

as the organizational counterweight to rational action theories of management

Question 11

Agency theory assumes goal ———– on the part of the contracted agent

Answer 11

divergence

Question 12

Stewardship theory assumes goal ——— because ——–

Answer 12

Assumes goal convergence because of shared collective interests with the contracted steward

Question 13

What three questions were addressed in the study?

Answer 13

1. ) What public management contract practices are applied to nonprofits in the contracting relationship?
2. ) What conditions affect the public management contract practices applied to nonprofit organizations in the contracting relationship?
3. ) To what extent are these management practices consistent with the tenet of agency and stewardship theories?

Question 14

Social Services are often characterized along several dimensions by…

Answer 14

• Varying levels of Tractable and Intractable Client Problems
• Clients that require specialized treatment, sometimes over long time periods, and who have varying levels of motivation
• Legislatively mandated services with imposed time and funding constraints for program development and implementation
• Programs that consist of ambiguous policy directives

Question 15

Four Broad Categories of Challenges to Service Provision in Contracting Relationships that have frequently been cited

Answer 15

1. ) Often a lack of competition by geographic region and service time that makes it hard for Public Managers to correct for supply side imperfections
2. ) Ideological motives to contract can also contribute to a lack of administrative capacity
3. ) Policy directives, policy goals, and corresponding program requirements are often ambiguously defined and infrequently monitored.
4. ) Contracting relationships btw gov and nonprofits can have the unintended effect of altering the nonprofit governance practices, causing mission drift, deprofessionalization of staff, and make org dependent on gov money.

Question 16

What is the supply-side imperfection that public managers often face in selecting service contractors?

Answer 16

too few market providers

Question 17

Two important factors in considering how contracts are to be developed and managed

Answer 17

1. ) The environment in which the contracted service exists and the specific nature of that service and whether it is deemed to be inherently governmental
2. ) The complexity of managing networked providers involved in joint production and delivery efforts for bundled services as opposed to overseeing a single contractor for a single service.