International principal-agent relationships: control, governance and performance

Abstract

This article builds upon and extends previous control research by examining the effect of different control mechanisms on behavioral and economic performance in international principal-agent relationships. To this end, a contingency model is advanced and tested that explores the role governance structure plays in influencing the performance effects of different control mechanisms, as perceived by the principal. Empirical results based on a sample of U.S. firms support the proposed contingency model and highlight the value of process and social controls as mechanisms for monitoring nonintegrated exchanges with autonomous agents. Theoretical and managerial implications of the findings are discussed along with suggestions for future research. (C) 2000 Elsevier Science Inc. All rights reserved.