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ABSTRACT Taking agency theory and stakeholder theory as points of departure, this article proposes a paradigm that helps explain the following: (1) certain aspects of a firm's strategic behaviour; (2) the structure of management‐stakeholder contracts; (3) the form taken by the institutional structures that monitor and enforce contracts between managers and other stakeholders; and (4) the evolutionary process that shapes both management‐stakeholder contracts and the institutional structures that police those contracts.
Hill et al. (Sun,) studied this question.
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