Perceptions of benevolence and the design of agency contracts

CEO-TMT relationships in family firms

Cristina C. Cruz, Luis Gomez-Mejia, Manuel Becerra

Research output: Contribution to journalArticle

249 Citations (Scopus)

Abstract

In this study, we view the contracts of top managers from an integrated agency theory-trust perspective, arguing that two conditions reflecting CEO risk bearing, top management team (TMT) behavioral uncertainty and CEO vulnerability, are negatively related to a CEO's perceptions of TMT benevolence toward him-/herself, which in turn influence the protective features of TMT contracts. Model tests on data from 122 family-owned firms in Spain support our hypotheses overall. Agency theory may be enhanced by accounting for a CEO's perceptions (as principal) of TMT benevolence and for the effect of those perceptions on contracts with TMT members (as agents).

Original languageEnglish (US)
Pages (from-to)69-89
Number of pages21
JournalAcademy of Management Journal
Volume53
Issue number1
DOIs
StatePublished - Feb 1 2010
Externally publishedYes

Fingerprint

Bearings (structural)
Managers
Chief executive officer
Top management teams
Family firms
Benevolence
Agency theory
Uncertainty
Integrated
Spain
Vulnerability

ASJC Scopus subject areas

  • Business and International Management
  • Business, Management and Accounting(all)
  • Strategy and Management
  • Management of Technology and Innovation

Cite this

Perceptions of benevolence and the design of agency contracts : CEO-TMT relationships in family firms. / Cruz, Cristina C.; Gomez-Mejia, Luis; Becerra, Manuel.

In: Academy of Management Journal, Vol. 53, No. 1, 01.02.2010, p. 69-89.

Research output: Contribution to journalArticle

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