Opening of the black box: the administrative strategies beneath principal-agent theory

Date

2001-08

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Publisher

Texas Tech University

Abstract

This study examines how agency heads execute organizational change within the context of principal-agent theory. Previous studies, B. Dan Wood (1990), in this area have been examinations of changes in agency output. However, the actual activity of the agency, i.e., the "black box", has not been addressed or accounted for in previous analyses. This research presents a conceptual framework whereby the managerial actions and strategies employed to effect the desired changes can be determined.

The agency examined in this study is the Equal Employment Opportunity Commission. Previous research (Wood, 1990) reported evidence that suggested principal-agent activity was in play in the agency. The central question examined is: how do agency executives effect changes desired by the principals? To answer the question, this research extends previous principal-agent based studies because it employs a dual method of examining managerial techniques and strategies, heretofore not examined. To investigate the management techniques employed by the agency, the goals, roles, interpersonal relations, and procedures—collectively known as the GRIP Model—were employed. Congruent with the GRIP model, a complimentary model designed to explicate the strategies employed by management was also adopted. The CARL—capacity, accessibility, readiness, and leverage—model is largely the planning strategy involved, at all levels, for achieving desired outcomes. This eight-part typology sufficiently captures the four commonly recognized domains of management techniques and four strategies customarily occurring during any period of organizational change.

The research shows differences in the management style and strategies employed by Elanor Holmes Norton and Clarence Thomas to respond to the demands of their respective principals during their tenure at the Equal Employment Opportunity Commission. The Norton administration employed a strong top-down management style and was shown to set aside internal strategic methodologies to accomplish their tasking by the Carter administration. In contrast, the Thomas administration analysis demonstrated a more bottom-up managerial style with stronger strategic management tactics employed than shown for the Norton era. The major contribution of this research is to put forth a felicitous methodology with which to explicate actual management behavior within an agency or organization.

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