Output-Based Agency Relationship and Organizational Justice What Equilibrium Is Possible?

Filippo Ferrari

International Journal of Management Sciences, 2014, vol. 3, issue 9, 704-717

Abstract: In a situation characterized by environmental turbulence and uncertainty, organizations can gain in efficiency by transferring to employees the risks related to the achievement of results. In the economic sphere, the Agency or Relationship Theory makes it possible to define the cost determinants of such risk transfers to the organization. However, the reduction in economic cost implies an increase in the psychological cost in terms of organizational justice, well-being and job satisfaction of the workers involved. A labor market characterized by high and rising unemployment induces workers to accept risks which they would otherwise consider unacceptable. This paper proposes a theoretical model that integrates the Agency Theory with evidence in the field of Organizational Justice, for the purpose of identifying the elements that moderate the relationship between risk transfer and organizational injustice, as perceived by the worker. It will also show the practical implications of the integrated model from the management standpoint.

Keywords: Human Resources Management; Agency Theory; Organizational Justice. (search for similar items in EconPapers)
Date: 2014
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