PRESENTATION IN THE WORKSHOP "STEWARDSHIP", Rome (Italy), 17-04-14

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STEWARDSHIP: POLICIES AND PRACTICES FOR AN ETHICAL MANAGEMENT OF RESOURCES

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PRESENTATION IN THE WORKSHOP "STEWARDSHIP", Rome (Italy), 17-04-14

  1. 1. 1 Prof. Dr. Alfonso Vargas Sánchez
  2. 2. APPLICATION TO AGRICULTURE CO-OPS (In Wales -UK- and Huelva -Spain-) A connection with the Agricultural Stewardship Association (ASA)? 2
  3. 3. Stewardship… • … as an ethic that embodies the responsible planning and management of resources, which can be applied to the environment, economics, etc. • … as a theological belief that humans are responsible for the world, and should take care of it. • … as a theory in which managers, left on their own, will act as responsible stewards of the assets they control. This theory is an alternative view of agency theory, in which managers are assumed to act in their own self interests at the expense of shareholders. 3
  4. 4. 4
  5. 5. 5 PRINCIPAL-STEWARD RELATIONSHIP. MANAGERS’ PSYCHOLOGICAL CHARACTERISTICS • Managers – whose needs are based on • growth, • achievement, and • self-actualization; – who are intrinsically motivated; – who are identified with their organizations and highly commited to organizational values; – who are inclined to use personal power, are more likely to serve organizational ends.
  6. 6. 6 PRINCIPAL-STEWARD RELATIONSHIP. SITUATIONAL (SOCIOLOGICAL) CHARACTERISTICS • Situations in which – the managerial philosophy is based on involvement and trust; – the culture is based on collectivism and low power distance, generally result in principal-steward relationship.
  7. 7. 7 Prof. Dr. Alfonso Vargas Sánchez
  8. 8. THEORETICAL BACKGROUND DAVIS, SCHOORMAN & DONALDSON (1997)
  9. 9. 9 STEWARDSHIP THEORY PRINCIPAL (shareholders)-STEWARD (top managers) RELATIONSHIP The steward believes that: – by working toward organizational, collective ends, personal needs are met; – its interests are aligned with that of the corporation and its owners. • Therefore, a steward is motivated to maximize organizational performance, thereby satisfying the interests of shareholders. • Because the steward perceives greater utility in cooperative than in individualistic behavior, and behaves accordingly, this behavior can be considered rational.
  10. 10. 10 STEWARDSHIP THEORY PRINCIPAL (shareholders)-STEWARD (top managers) RELATIONSHIP • If the executive’s motivations fit the model of man underlying stewardship theory, empowering governance structures and mechanisms are appropriate. Thus, a steward’s autonomy should be deliberately extended to maximize the benefits of a steward, because he or she can be trusted. In this case, the amount of resources that are necessary to guarantee pro-organizational behavior are disminished, because a steward is motivated to behave in ways that are consistent with organizational objectives. Indeed, control can be potentially counterproductive, because it undermines the pro-organizational behavior of the steward, by lowering his or her motivation.
  11. 11. 11 STEWARDSHIP THEORY PRINCIPAL (shareholders)-STEWARD (top managers) RELATIONSHIP • Donaldson and Davis (1991) argued that, for CEOs who are stewards, their pro-organizational actions are best facilitated when the corporate governance structures give them high authority and discretion. Structurally, this situation is attained more readly when the CEO chairs the board of directors. Such a structure would be viewed as dysfunctional under the agency theory model of man. However, under the stewardship model, stewards maximize their utility as they achieve organizational rather than self-serving objectives. The CEO-Chair is unambiguously responsible for the fate of the corporation and has the power to determine strategy without fear of countermand by an outside chair of the board.
  12. 12. 12 STEWARDSHIP THEORY MANAGERS AS STEWARDS APPROACH TO GOVERNANCE SOCIOLOGICAL AND PSYCHOLOGICAL MODEL OF MAN. BEHAVIOR COLLECTIVISTIC PRO-ORGANIZATIONAL TRUSTWORTHY MANAGERS MOTIVATED BY PRINCIPAL OBJECTIVES MANAGER- PRINCIPAL INTEREST CONVERGENCE STRUCTURES THAT FACILITATE AND EMPOWER OWNERS’ ATTITUDE RISK-PROPENSITY THE PRINCIPAL- MANAGER RELATIIONSHIPS RELY ON TRUST (“THE WILLINGNESS TO BE VULNERABLE”)
  13. 13. 13 PSYCHOLOGICAL MECHANISMS STEWARDSHIP THEORY MOTIVATION HIGHER ORDER NEEDS (GROWTH, ACHIEVEMENT, SELF- ACTUALIZATION). INTRINSIC SOCIAL COMPARISON PRINCIPAL IDENTIFICATION HIGH VALUE COMMITMENT POWER PERSONAL (EXPERT, REFERENT)
  14. 14. 14 SITUATIONAL MECHANISMS STEWARDSHIP THEORY MANAGEMENT PHILOSOPHY INVOLVEMENT ORIENTED RISK ORIENTATION TRUST TIME FRAME LONG TERM OBJECTIVE PERFORMANCE ENHANCEMENT CULTURAL DIFFERENCES COLLECTIVISM. LOWER POWER DISTANCE
  15. 15. 15 MANAGEMENT PHILOSOPHY (THEORY) INVOLVEMENT ORIENTED (STEWARDSHIP) ADOPTION HIGH LABOR COSTS. APPROACH FOCUSED ON LONG-TERM EFFECTIVENESS AND QUALITY THROUGH SELF-CONTROL. UNSTABLE, UNCERTAIN (RISKY) ENVIRONMENTS. HOW TO DEAL WITH INCREASED UNCERTAINTY AND RISK TRAINING AND EMPOWERING PEOPLE. REDESIGNING JOBS TO BE MORE CHALLENGING AND MOTIVATING.
  16. 16. 16 Prof. Dr. Alfonso Vargas Sánchez

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