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? Academy of Management Review, 1989, Vol. 14, No. 1, 57-74.
KATHLEEN EISENHARDT M. Stanford University
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,
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Correspondence can be sent to her at the Department of Industrial Engineering and Engineering Management, 346 Terman Building, Stanford University, Stanford, CA 94305. The author thanks Paul Adler, Michele Bolton, Philip Bromiley, Jim Hodder, William Ouchi, Gerald Salancik, Kaye Schoonhoven, and Robert Sutton for their comments and suggestions. 74