System trust - and interplay between institutional theory and agency theory final submission

Poole, Adam

Abstract

This developmental paper addresses one of the key dilemmas of Agency Theory, specifically how does the principal in a relationship evaluate and assess that the agent in the relationship is conducting themselves in an appropriate manner and behaving in their best interests and with integrity utilising the context of the purchase of a high risk credence product where information asymmetry exists between the principal and the agent.

In such circumstances it is not possible for the principal to use either an outcome based mechanism or information system mechanism as suggested by Eisenhardt (1989) to resolve this dilemma leaving the principal at considerable risk.

This developmental paper proposes that in such circumstances the principal relies upon ‘environmental’ or ‘system’ trust to resolve the dilemma, and in doing so demonstrates that ‘environmental’ or ‘systems’ trust can be seen as interplay between institutional theory and agency theory.

Citation

Poole, A. (2017, September). System trust - and interplay between institutional theory and agency theory final submission. Paper presented at British Academy of Management

• Presentation Conference Type: Conference Paper (unpublished)
• Conference Name: British Academy of Management
• Start Date: Sep 5, 2017
• End Date: Sep 7, 2017
• Acceptance Date: Sep 5, 2017
• Peer Reviewed: Not Peer Reviewed
• Keywords: trust, system trust, institutional theory, agency theory
• Additional Information: Title of Conference or Conference Proceedings : British Academy of Management Conference 2017 Warwick