Agency theory is an important, yet controversial, theory. This paper reviews agency theory, its contributions to organization theory, and
the extant empirical work and develops testable propositions. The conclusions are that agency theory (a) offers unique insight into information systems, outcome uncertainty, incentives, and risk and (b) is an empirically valid perspective, particularly when coupled with complementary perspectives. The principal recommendation is to in corporate an agency perspective in studies of the many problems having a cooperative structure.
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