CMA Foundation · Fundamentals of Business Economics and Management · Stewardship Theory and Agency Theory of Management
According to stewardship theory, how does a steward typically view the relationship between personal success and organisational success?
In stewardship theory, a steward believes personal success comes through achieving organisational success. Interests of manager and owner are aligned, so there is no inherent goal conflict. Agency theory, in contrast, assumes divergent interests between principals and agents, creating the need for monitoring.
- APersonal success and organisational success are in conflict
- BPersonal success is achieved by ensuring organisational successCorrect
- COrganisational success is irrelevant to personal utility
- DPersonal success must be secured before organisational goals
Explanation
A steward sees his or her own utility as maximised through collective, organisational achievement, so there is no basic goal conflict between manager and owner. The idea of conflicting interests is an agency-theory assumption, which makes the other options incorrect.
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