Control Orientation and Firm Performance: Test of an Agency Theory Interpretation of Strategic Human Resource Management
Welbourne, Theresa M.; Cyr, Linda A.
Agency theory is used to develop an approach toward organizational control that elaborates upon the construct underlying strategic human resource management. Additionally, firm risk is examined as a moderator to determine how control orientation affects firm performance. A sample of initial public offering firms is studied, and both short and long-term stock price, in addition to firm survival, are predicted. Results support agency and SHRM notions that incentive alignment increases stock price in high risk firms; however, it negatively affects firm survival. Several explanations for the polarizing effect of risk are discussed
work; business; organization; company; incentive; executive; employee; performance; stock; price; human resource; management; SHRM