Perceptions of benevolence and the design of agency contracts: CEO-TMT relationships in family firms

Cristina C. Cruz, Luis R. Gómez-Mejia, Manuel Becerra

Research output: Contribution to journalArticlepeer-review

287 Scopus citations

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

ASJC Scopus subject areas

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

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