Multiple‐Principal Demands and CEO Compliance in Emerging Market State‐Owned Enterprises

Abstract This study addresses multiple‐principal–agent power dynamics in state‐owned enterprises (SOEs) in emerging markets. We investigate under what conditions agents (CEOs) accede to demands of government‐linked principals. Our qualitative study in Indonesia advances agency theory by disaggregating and categorizing government‐linked principals. We also examine three types of principals’ demands (commercial, social, and private) and five types of mechanisms influence agent responses with principals’ private demands (collusion among prin‐cipals, career‐ending threats by principals, plausible deniability through CSR, political ties as enabler, political ties as buffer). Based on our findings and on insights from the public adminis‐tration literature, we develop a conceptual framework that advances multiple agency theory.