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Davis, Schoorman, and Donaldson, in the January 1997 issue of AMR, present a model of stewardship theory as an alternative to agency theory. In their view a steward is one whose interests align with those of his or her principal, whereas an agent is one whose interests do not align with those of his or her principal. We appreciate their contributions, especially their principal-manager choice model, because they have provided us with an incentive to reflect on agency theory and to clarify further how stewardship relates to agency theory.
A primary concern we have with the Davis et al. article is the agency logic used. The authors seem to confuse agency theory with the agency problem. In particular, when discussing agency theory, they assume a divergence of interests between agents and principals; it is more accurate to view principals and agents as self-interested.l This misspecification of agency theory creates a "straw man" of sorts, and the result is that a number of gaps can be identified in the authors` modified definition of agency theory.
We suggest the use of a more comprehensive view of agency theory: one that accommodates the conditions Davis et al. use to define stewardship theory but, at the same time, lessens the explanatory scope of stewardship theory. For example, "trust" is mentioned as a characteristic of stewardship, but agency theory accommodates this element by viewing the principal-agent contract as embedded in a variety of surrounding factors (Pratt & Zeckhauser, 1991). The development of long-term relationships also can...