Who invented stewardship theory?

Donaldson and Davis
Stewardship Theory, developed by Donaldson and Davis (1991 & 1993) is a new perspective to understand the existing relationships between ownership and management of the company. This theory arises as an important counterweight to Agency Theory.

When was stewardship theory introduced?

Stewardship theory was introduced by Donaldson and Davis (1989) as a normative alternative to the agency theory. The executive manager, under stewardship theory, far from being an opportunistic shirker, essentially wants to do a good job, to be a good steward of the corporate assets.

What is the stewardship theory based on?

The assumptions of stewardship theory are that long-term contractual relations are developed based on trust, reputation, collective goals, and involvement where alignment is an outcome that results from relational reciprocity.

What is the objective of stewardship theory?

Stewardship theory is a framework which argues that people are intrinsically motivated to work for others or for organizations to accomplish the tasks and responsibilities with which they have been entrusted.

What is the difference between agency theory and stewardship theory?

Agency theory suggests CEOs take advantage of their powerful positions to maximize their personal economic utility, whereas stewardship theory suggests CEOs are motivated through intrinsic awards and will balance their interests with those of other stakeholders.

What is the advantage of stewardship theory?

Stewardship Theory This theory highlights the existence of healthy working relationships between managers and shareholders, which, in turn, helps minimize the costs of monitoring and controlling while increasing the speed of decision-making and the autonomy of managers and executives.

What are the strength of stewardship theory?

The stewardship theory holds that managers inherently seek to do a good job, maximize company profits and bring good returns to stockholders. They do not necessarily do this for their own financial interest, but because they feel a strong duty to the firm.

Why agency theory is better than stewardship theory?

How the stewardship theories influence good governance?

Stewardship theory holds that ownership doesn’t really own a company; it’s merely holding it in trust. The operation may be a vehicle for a higher calling or designed to honor a founder’s initial vision, so making a profit often takes a back seat to meeting a company’s social standards.

How does stewardship theory influence good governance?

The Goal of Stewardship Governance Under the stewardship theory, company executives protect the interests of the owners or shareholders and make decisions on their behalf. Their sole objective is to create and maintain a successful organization so the shareholders prosper.