Stewardship and Agency Theories: Do Managers Serve the Organizations or Do Organizations Serve Them?

Two management theories have in recent years furnished divergent views about the roles and motives of managers. In the economically and materially oriented "agency theory", managers are introduced as people who are after their personal interests, preferring them to the interests of the organizations. The approach entails a search for methods that would harmonize the goals of the managers and the organization, thus transforming the managers from agents to stewards. In the "stewardship theory", which provides a social and psychological outlook, managers are viewed as stewards who devote their time and energy to the organization and who put the interests of the organization ahead of their own. The present article reviews both approaches and attempts to offer suggestions on how to use the two theories eclectically in organizational situations.