Skip to content

CMA Foundation · Fundamentals of Business Economics and Management · Stewardship Theory and Agency Theory of Management

Which view of human behaviour about managers is the central assumption of stewardship theory?

Stewardship theory assumes managers are collectivist and pro-organisational. They gain satisfaction from achieving organisational goals and act as trustworthy stewards of owners' resources, unlike agency theory, which treats managers as self-interested and opportunistic individuals needing close monitoring and incentive alignment.

  1. AManagers are opportunistic and always act to maximise their own wealth
  2. BManagers are collectivist and pro-organisational, finding satisfaction in achieving organisational goalsCorrect
  3. CManagers are motivated only by monetary incentives linked to share price
  4. DManagers need constant external monitoring to prevent shirking

Explanation

Stewardship theory assumes managers are trustworthy stewards whose interests align with those of the organisation and its owners. They derive satisfaction from organisational success. The opportunistic, monitoring-heavy view in the other options belongs to agency theory.

Did you get it right without looking?

One question tells you little. A timed set on Stewardship Theory and Agency Theory of Management shows your real accuracy, how long you take and where you lose marks.

Practise Stewardship Theory and Agency Theory of ManagementFree diagnostic mock

More Stewardship Theory and Agency Theory of Management questions