Individuals, persons and agency theory – contrasted views on social interactions at work

Abstract

The paper draws on the distinction between the concepts of individual and person to show how management rhetoric addresses workers as persons whereas actual management practices organize work as if workers were opportunistic individuals. We argue that this paradox is partly due to the widespread influence of agency theory whose conception of the firm, based on the agency costs generated by the supposedly non-cooperative workers’ behavior, became an influential normative model. Our argument is that agency theory’s basic assumption powerfully contributed to further and legitimize the ongoing power shift from labor to capital. Major institutional changes in corporate governance regulation are required to make firms’ behavior consistent with their rhetoric.