Strategic Management Theories

Strategic Management Theories – Term Paper (Proposal)

Table of Contents

Contents                                                                                                                            Pages

1.0 Introduction. 3

1.1 Background of the study. 3

1.2 The research problem.. 5

1.3 The scope of the study. 7

1.4 Justification of the study. 7

1.5 Significance of the study. 8

1.6 Research question, aim, objectives, and hypotheses. 8

1.8 Conceptual framework. 10

2.0 Review of the relevant research. 10

2.1 Organizational development 10

2.2 Origins, history, and development of the agency theory. 12

2.3 Other theories related to the agency theory and organizational development 14

2.4 Influence of the agency theory on management practices. 15

2.5 Management practices in the United Arab Emirates. 17

2.6 Summary of the literature and research gaps. 18

3.0 Methodology. 18

3.1 Philosophical foundations of the study. 19

3.2 Method. 20

3.3 Research design. 20

3.4 Research strategy. 21

3.5 Sample and sampling procedure. 21

3.6 Data collection tools. 22

3.7 Data analysis. 23

3.8 Ethical considerations. 23

3.9 Presentation of findings. 25

4.0 Potential contribution to literature. 25

5.0 Tentative research timeline. 26

6.0 Conclusion. 26

7.0 Appendices. 26

7.1 Appendix 1: Questionnaire. 26

7.2 Appendix 2: Interview.. 27

List of tables

Table 1. Working conditions and environment 28

List of figures

Figure 1. Conceptual framework of the study. 11

Figure 2. Conceptual framework linking organizational development to organizational commitment 12

Figure 3. Planned change management model 13

Figure 4. Type of agency problems. 15

Figure 5. The research onion advanced by Sanders. 23

1.0 Introduction

1.1 Background of the study

Management theories have undergone significant development and evolution over time due to continuously emerging evidence from empirical studies. The concepts of management theories have been improved and expanded tremendously by vigorous and frequent research activities. Scholars and practitioners continuously test the veracity of these theories in various organizational settings to determine their applicability and influence on firm operations and performance. This is because the evidence from actual operations and performance of firms helps reinforce the theoretical conceptualizations and reveals realistic gaps in the theoretical frameworks that require more knowledge development from evidence-based research. 

Strategic management has gained prominence as organizations encounter difficult, complex, and turbulent environments. Organizational leaders are said to be strategic when they plan how to align the organizational resources with organizational goals and a find way of executing their plans successfully to the benefit of all stakeholders. Therefore, managers are expected to be creative thinkers that can guide their organizations to profitability and prosperity. They are expected to understand deeply the environment surrounding their organizations, project the environmental changes likely to occur in the future, assess the risks their organizations face, and have sufficient knowledge about which alternative interventions are best suited for their organizations. Consequently, leaders and senior managerial executives in successful firms worldwide focus more on constant change and improvement than excellence, because continuously changing organizations often renew themselves to navigate their ever-changing operational environments (Sawagvudcharee and Yolles 18). In turn, investors and owners of business organizations place the mandate of running their firms in the hands of managers that are thought to be highly skilled in their trade and practice. They trust that these leaders and managers will work in the best interest of the shareholders. In this regard, managers act on behalf of the business owners, investors, and shareholders as the people that run the organizations on a daily-to-day basis expected to spur the performance and prosperity of the business enterprises.

However, the interests of the managers are increasingly being questioned amid the proliferation of managerial malpractices in large and renowned corporations thought to be the hallmarks of organizational excellence. Media widely cover managerial misconduct, with large corporates being implicated in high-profile cases and paying hefty fines for violating laws and defrauding clients. For instance, the giant German car manufacturer, Volkswagen, was accused of doctoring the emission reports of their vehicles so that they could be viewed as more environmentally friendly than their competitors. Similarly, Boeing was taken to court for causing the fatal crashes of two aircrafts belonging to Lion Air and Ethiopian airline that killed all people on board (Department of Justice para 2). The company was accused of not training the pilots of airlines that had purchased and operated the new Boeing 727 Max aircraft, thus leaving them without sufficient knowledge about how to react when their planes malfunctioned or met adverse flying conditions. In addition, the company’s employees allegedly concealed vital material information to the Federal Aviation Administration (FAA) covering the misdeeds of their company (Department of Justice para 2). Consequently, flying this plane was suspended worldwide as the courts sought to unravel the misdeeds of Boeing, placing a sharp focus on the possible misconduct of the company’s senior management yet again. These events demonstrate that sometimes, managers can act for their interests while ignoring the more significant and big-picture interests of their key stakeholders. Consequently, some senior executives become a severe liability to their firms, costing them huge finances in losses and fines, and damaging their reputations, while the leadership profits individually from their malpractices. This unscrupulous behavior in the higher echelon organization leaders and executives has raised moral concerns about managerial practices. In addition, this case presents a scenario in which the employees’ interests, as agents of their principal, Boeing as the employer, were overridden by those of the principal, specifically profiteering and maintaining customers. This indicates that sometimes the interests of the principal and agents converge, even when the principal has coerced the agents (employers) to overlook their own and act unethically. This has invited a reconsideration of the assumptions made in the agency theory. 

The agency theory has been used widely to explain the relationship between managers and shareholders and between directors and executive managers of firms. When applying this theory, the managers are viewed as agents, while the shareholders, who own the firm, are considered the principals. Similarly, boards of directors are considered principals, while the chief executive officer is the agent acting on the principal’s behalf.  According to the theory, the agents are expected to be experts in organizational management because of their well-developed professional capabilities, which the principals lack. They are expected to mobilize all available resources and align them to the corporate vision, mission, and values to make the firm profitable, successful, and sustainable. However, the conceptualization of the agency theory has been questioned, particularly when the interests of agents conflict with those of the principals. The widely-established belief that agents always function in the interest of their principals is being overturned by the evidence emerging from firms globally. Consequently, the quality of the principal-agent relationship is viewed as critical for explaining the good performance of companies using the agency theory. Therefore, it is no longer widely held that agents always promote organizational change and growth or contribute positively to the operations and performance of organizations.       

1.2 The research problem

Most studies on strategic management theories have been conducted in western countries, where research activities are more fervent compared to other regions globally. In this regard, the existing knowledge of strategic management theories has been conceptualized in the western culture and settings, and cannot be generalized to non-western circumstances. However, emerging economies are growing fast and formalizing their management approaches. Leaders and managers in firms in these economies are increasingly knowledgeable about the good practices that have been used successfully in developed economies. They are also using this knowledge in their firms, either in their original forms or their customized versions, to suit the conditions of their locations and circumstances. However, there is an evidential scarcity of how these theories are understood and applied by the leaders and managers of firms in emerging economies.

The United Arab Emirates is undergoing a rapid diversification of its economy to mitigate the imminent effects of relying excessively upon finite oil and gas resources. The country’s rulers have realized that creating wealth from oil and gas will dwindle as the resources become depleted.  The overarching concern perturbing these leaders is that once the oil and gas reservoirs dry out, the country will not have any other wealth-generating resource, considering that their country is primarily a desert. Consequently, the leaders have acted proactively by promoting the emergence of non-oil economic operations to continue generating national wealth. They have created a conducive environment for establishing non-oil-related industries, such as banking, real estate, international trade logistics, advanced information and communications technologies, healthcare, manufacturing, and many others. In turn, local and international investors have responded to this initiative by establishing various firms in the country with the assistance of the Emirati government. The success of these firms varies widely and has not been sufficiently linked to strategic management theories through empirical evidence.  

From another perspective, the Emiratis are an increasingly educated society. Many Emiratis seek academic and professional education in the western world with their government’s assistance through scholarships. Many others finance their education in western countries with private funds. However, after graduating, these professionals return home immediately or after working in those countries for a while. They bring the foreign-acquired knowledge and use it in the local firms. Although this is the general expectation, evidence on the ground may differ. It is possible that these professionals abandon their managerial lessons and revert to traditional emirate approaches to organizational management. It is also possible that they modify the foreign-acquired knowledge to suit the emirate environment and circumstances.  However, there lacks empirical evidence about which theories these leaders and managers use, or how they apply them in running their forms. Besides, there is a scarcity of evidence indicating that the strategic management theories influence the operations and performance of firms domiciled in the United Arab Emirates.

1.3 The scope of the study

 This study is confined to understanding the influence of the agency theory on the processes and outcomes of firms in the United Arab Emirates. Although it will engage in a theoretical discussion of the implications of the agency theory in United Arab Emirates’ firms, it will focus more on the empirical evidence gathered from management practitioners in firms located in this country. In addition, this study will not focus on any individual industry in the United Arab Emirates; rather it will seek to provide a general insight into and overview of the application of the agency theory among leaders and managers of firms from different firms drawn from the diverse industries in the country.

1.4 Justification of the study

Agency theory is controversial and invites serious concerns among management scholars and practitioners. The standing of the agency theory as an organizational theory and applicability in diverse organizational settings need to be verified. This process is premised on the notion that theory needs to be translated into practice to verify its efficaciousness in real settings. The agency theory is premised on the belief that the principal’s and agent’s interests should be matched for the value of a firm to be maximized. This requires that managers as agents align the organizational resources to fit the organization’s strategic direction and goals. In the process of aligning organizational resources and capabilities, firms develop and grow. Subsequently, the agency theory is closely tied to organizational development, which focuses on improving existing organizational processes and creating new ones to maximize the capacity, potential, and efficaciousness of an organization and its members. While the nexus between the agency theory and organizational development can be explained theoretically, its empirical evidence is inconclusive because it has not been proven conclusively that applying the agency theory aids positive organizational development and growth. In this regard, this study is justified in exploring the nexus between the agency theory and organizational development in settings that have been underrepresented in research initiatives.   

1.5 Significance of the study

This study is significant because it addresses an area that has received little research attention. The empirical evidence linking the agency theory to organizational development is scarce, particularly in non-western settings. Therefore, this study will contribute to the existing knowledge evidencing the familiarity and application of strategic management theories in organizational processes and performance. In particular, the findings from this study are expected to augment those from previous studies in this area. They are also expected to provide more insights into the management practices in non-western settings, such as those in the United Arab Emirates.

1.6 Research question, aim, objectives, and hypotheses

This study seeks to answer the questions

  1. Are the leaders and managers of firms in the United Arab Emirates familiar with strategic management theories?
  2. Do leaders and managers of firms in the United Arab Emirates employ strategic management theories to run their firms
  3. Do applying strategic management theories influence the operations and performance of firms in the United Arab Emirates?

To answer these questions, this study explores and describes the conceptualization, perceptions, and applications of strategic management theories by leaders and managers in firms in the United Arab Emirates. This aim is informed by the lack of empirical evidence about how managers in the United Arab Emirates employ strategic management theories and whether their application has influenced the operations and performance of firms based in the country.

Subsequently, this study’s objectives are:

  1. To explain the strategic management theories
  2. To determine the familiarity of the strategic management theories among leaders and managers of firms in the United Arab Emirates
  3. To unearth the perceptions of the strategic management theories among leaders and managers of firms in the United Arab Emirates
  4. To determine whether leaders and managers of firms in the United Arab Emirates use strategic management theories to run their firms
  5. To determine whether the use of strategic management theories in firms in the United Arab Emirates has influenced the operations and performance of firms in the United Arab Emirates

The hypotheses formulated for this study are:

Ho1: There is no significant familiarity with the strategic management theories among leaders and managers of firms in the United Arab Emirates.

Ho2: There is no significant familiarity with the agency theory as an overarching strategic management theory among leaders and managers of firms in the United Arab Emirates.

Ho3: The leaders and managers of firms in the United Arab Emirates do not use the strategic management theories significantly to run their organizations.

Ho4: The application of strategic management theories does not significantly influence the operations of firms in the United Arab Emirates.

Ho5: The application of strategic management theories does not significantly influence the performance of firms in the United Arab Emirates.

1.7 Strategic management theories

Strategic management theories help to explain the organizational development of different firms in various settings. Firms take different development and growth trajectories based on their unique circumstances and settings. Consequently, some strategic management theories can explain the development and growth phenomenon of firm in particularly circumstances and settings but not in others. Although the agency theory is the main theoretical focus in this study, other related theories, like the resource-based view, contingency theory, stakeholder theory, and stewardship theory will be explored to bolster the understanding of the effects of the agency theory on the management practices and influence on the organizational development of firms in the United Arab Emirates.

1.8 Conceptual framework

The conceptual framework guiding this study is outlined in figure 1.

Figure 1. Conceptual framework of the study

2.0 Review of the relevant research

2.1 Organizational development

Organizational development has been a dominant subject in organizational research. For instance, Hayat et al. (2) using a qualitative study of the sports industry explained extensively the concept of organizational development by noting that it was related to utilizing information, arranging and executing ideas, structuring policies and procedures, deploying the lessons learned, and implementing far reaching strategies for improving organizational performance. They also explained that organizational development can be considered from an individual, group, or organizational perspective based on the type of organizational performance-promoting strategies. Their study used a conceptual model that linked organizational development to organizational commitment, as illustrated in figure 2.

Figure 2. Conceptual framework linking organizational development to organizational commitment

Source: Hayat et al. (4)

 Hayat et al. (3) assert that human capital was central to organsational development because it turned knowledge, information, and skills into products and services, which promoted organizational performance, success, and sustainability. Human capital injected their capabilities, innovativeness, specialized job-related expertise, and learning into the organization to advance the organizational interests alongside their own.  Their study revealed that organizational commitment promotes organizational development through improved working conditions and procedures, and human capital development. In the same vein, Pearce and Pons (10) investigate how implementing lead organizational practices advanced organization development by changing the traditional organization into a lean and learning one. They argued that a lean and learning organization continuously renewed itself through embracing continuous organization-wide change rather than using isolated improvements in episodic and fragmented change initiatives. Their change approach employed the planned change management model illustrated in figure 3. They concluded that respecting all the organizational members fostered far-reaching organizational transformation, making the implementation of lean practices effective and long-lasting.

Figure 3. Planned change management model

Source: Pearce and Pons (15)

In addition, Mishra (762) noted that organizational development had adopted sustainability approaches transforming it to sustainable organizational development. This means that the organizational development strategies were embracing green approaches to management practice to make firms sustainable, thus guaranteeing their long-term performance and survival. Mishra (788) lauded the emergence of the green human resource management practices that encouraged pro-environmental behaviors in organizations. The researcher found that the support from the senior management accompanied by mutual learning within and between the organizational departments promoted green behaviors in employees, bolstering sustainable organizational development. Mishra (779) also concluded that green human resource management was part of an interdisciplinary framework aimed at developing and building a holistic green organization, which was more sustainable than the traditional organizational configuration. The other components of the interdisciplinary framework included green corporate social responsibility initiatives, green supply chain management approaches, and a green competitive advantage strategy, which presented a steep learning curve as part of the organizational development process.

2.2 Origins, history, and development of the agency theory

The agency theory has a longstanding history that dates back before the term was officially adopted and the theoretical framework was formally supported by scientific research. For instance, Panda and Leepsa (74) conducted a review of the existing literature to explore the dominant ideas, perspectives, and the challenges related to the agency model to understand how the conflict of interest and agency costs arise. They noted that the agency theory as one of the oldest management and economics theory outlines the challenges encountered in separating business owners and managers and how these challenges can be eliminated. They also noted that the agency problem had gained prominence and permeated many organizations since the emergence of joint stock companies when the ownership structure and those playing the principal and agent roles became complicated. Panda and Leepsa (77) noted that Adam Smith was perhaps the first scholar that identified and explained the agency problem using the agency theory. However, the description of the agency problem transformed in the 1960s and 1970s when risk-sharing became the norm of addressing the agency problem. Panda and Leepsa (78) also noted that two types of agency theories had emerged at the time based on the conceptualization of the principal and agent problem. The divergence theoretical conceptualizations led to the positivistic agency theory and behavioral agency theory. According to the positivistic agency theory, the principal was opportunistic and exploited the agent through hazardous working conditions. Contrastingly, the behavioral agency theory diverts the attention away from the principal towards the agent. According to this theoretical version, agents are the main players in the principal-agent relationship. Consequently, the agent’s performance is heavily influenced by the availability of perfect opportunities, motivation, and capabilities (Panda and Leepsa 79). Consequently, Panda and Leepsa (79) revealed the fundamental differences between the two versions of the agency theory. For instance, they argued that while the positive agency model focused on the principal-agent relationship and the agency problem, the behavioral agency model dwelt on the nexus between agency cost and agent’s performance. In addition, while the positive theories viewed agents as logical reward seekers, behavioral theorists viewed agents as being boundedly logical and risk averse individuals that traded of internal and external benefits. Further, the positive theorists view is focused on the agency cost and the objectives of the principal, which the behaviorist theorists view the agent’s motivation and performance to be linearly related.

Altogether, Panda and Leepsa (80) noted that the agency costs and conflict of interest between the principal and agent emanated from information asymmetry, different risk preferences, moral hazards, and separating organization ownership from control and operations. Therefore, their review of the literature revealed several solutions that had been cited, which included independent board of directors, managerial ownership, robust ownership control, and establishing various committees to help control the agency conflict and the undesirable costs it presented. They also expanded on the agency problem by advancing three types, which went beyond the principal and agent and involved other stakeholders, as illustrated in figure 4.

Figure 4. Type of agency problems

Source: Panda and Leepsa (80)

Zogning (1) revisited the agency theory by tracing its development since it was first developed by Adam Smith in his famous book an enquiry into the nature and causes of the wealth of nations back in 1776. At the time, the agency theory was set when family companies were the dominant business structures at the time. The theory sought to explain the relationship between the managers and family owners of businesses, with the owners being the principals and the companies’ senior management being the agents in what was termed as the agency relationship. At the time, it was believed that the senior managers in family-owned businesses did not have the wherewithal of advancing the interests of the owners because they were not vested financially in the organizations they managed. Therefore, they were prone to negligence and profusion because their attention was towards the small organizational manners that did not honor their master’s interests (Zogning 1). However, Zogning (2) explained that the owner-manager relationship changed when family businesses declines as they became replaced with corporate entities that were large and complex, and managerial practice became a profession in which skills was acquired through professional training and managerial competence because the focus of recruiting and engaging business leaders and managers. Consequently, the ownership of business has transformed from being premised in families towards being vested in shareholders. In turn, the owner-manager relationship has transformed to the shareholder-manager relationship, transforming the translation of the agency theory into practice.

Haruna et al. (9) explained the agency theory as a principal-agent theory in which the principal hired an agent to perform duties that the principal was too busy to undertake. Unfortunately, the principal was also too busy to monitor the agent sufficiently, resulting in the agent serving self-interests rather than those of the principal or organization. From this perspective, the agency theory describes employees as extrinsically motivated, opportunistic, and self-interested individuals that should be monitored closely by managers using performance measurement and evaluation systems (Haruna et al. 9). However, Haruna et al. 9 argued that employees were likely to oppose managerial control to maintain their professional autonomy, which caused tension in the manager-employee relationship. Nonetheless, the authors took an issue with the lack of primary qualitative data to support their assertions, and recommended that future study use an empirical approach.   

Pouryousefi and Frooman (80) added the business ethicists’ perception of the agency theory as one of the agency model’s development. They suggest that the unilateral focus of the agency theory should be replaced by a multilateral one, which considers the social interaction structure. They noted that reciprocity could be the moral solution to the agency problem.

2.3 Other theories related to the agency theory and organizational development

The agency theory is a broad theory that accommodates other theoretical paradigms related to strategic organizational management. for example, Sawagvudcharee and Yolles (18) explained that contemporary business organizations were adopting sustainable strategic business management models to navigate their complex environments while maximizing the returns and optimizing outcomes. They argued that the strategic management paradigm of fostering sustainable organizational improvement as advanced by the input-output model, the resources-based view, and the agency model.  They noted that excellent business enterprises focused on improving and changing constantly rather than striving for excellence. In the same vein, Hoskisson et al. (285) endeavored to develop an integrated theoretical framework how firms can incentivize stakeholders to invest in their firms to bolster resource-based competitive advantage and increase shareholder value. Their model was anchored in a shareholder-dominant theory, which integrated the stakeholder and agency theories of strategic management.  Their proposed theoretical model, which is an expansion of the stakeholder and agency theories present devices to protect shareholder value by overcoming the dilemma presented by incentive uncertainties, which have behavioral and environmental components.  Subsequently, they suggested that a mix of complementary protective devices, which incorporate relational governance, ex post monitoring. Resource depreciation, and property rights allocation components, could be used to address the environmental and behavioral constraints that undermined stakeholder value derived from firm-specific investments. Nonetheless, the authors recommended further studies into the contagion effect and interaction among stakeholders based on the integrated theoretical framework they developed.

Chrisman (1051) discussed the stewardship theory alongside the agency theory. His study was founded on the presumption that the stewardship theory was a popular alternative to the agency theory when studying family-run organizations and seeking to understand their governance structures. In his study, he used the two theories to explain goal alignment and control systems. The compared the assumptions made in the stewardship and agency theories and identified the differences between the two in the way they viewed realism and relevance and the alignment of interests of stewards and agents in family businesses. Eventually, Chrisman (1063) proposed a middle ground that combined the two theories by modifying their assumptions regarding the model of man as a stewards and agent, their goals vis-à-vis those of the organization, and the control systems in family businesses. His proposition suggested the incorporation of considerations related to bounded rationality and pre-employment to reinvigorate both theories. In the end, he felt that more empirical and theoretical research was needed to study the conceptualization of organizational governance using the agency and stewardship theories.

2.4 Influence of the agency theory on management practices

Evidence of the impact that the principal-agent relationship has on the operations and performance of organizations is building rapidly due to the ongoing vigorous research activities globally.  For instance, Partyka (176) explain that the agency theory has been transformed the principal-agent relationship into a contractual one. They note that the application of the agency theory in supply chain management has translated the principal-agent relationship into a contractual one between sellers and buyers, and subsequently between consumers and suppliers, and managers and suppliers. In the same vein, Evans and Tourish (271) investigated the application of the agency theory in performance appraisals in firms and revealed the several differences between the ideal and practical situations. The explained the different assumptions about the principal’s and agent’s interest and their contribution to the agency problem. For instance, they argued that the interests of the principals conflict those of agents, because the principals’ focus on promoting shareholder value while the agents’ are solely interested in self-aggrandizing pursuits (Evans and Tourish 277). The used the human resource management practices in performance appraisals to advance their arguments on the applications of the agency theory in organizational practice. Their study was motivated by the paradox in performance appraisal interviews, presenting positive and negative individual and organizational outcomes. On one hand, the performance appraisal interviews helped scrutinize, reward, and penalize employees. On the other hand, performance appraisal interviews were ineffective and harmful to the employees and organizations. This conflict emanated from the economic approach to individual and organizational performance, in which the actors in the organization are solely motivated by economic self-interest. Consequently, Evans and Tourish (278) argued that managers undertook the performance appraisals with two contradictory mindsets, which they termed as ‘an Orwellian state of Doublethink’ in which distrust permeated the manager-shareholder and employer-employee relationships.  Similarly, Maestrini et al. (1) investigated the performance measurement paradox using the agency theory. They postulated that the agency theory can be used to explain the effect of supplier monitoring and incentives as supplier performance measurement and management practices that influences the operational efficiency of suppliers. In their investigation, the authors looked at the supplier-organization relationship and the influence of monitoring and incentives on the supplier performance. The researchers revealed that when suppliers are monitored and incentivized, their operational performance was improved. However, the congruence between the goals of the organization and suppliers did not significantly mediate the monitoring performance relationship. Contrastingly, supplier opportunism mediated effectively the organizational monitoring-supplier performance relationship but did not effectively mediate the organizational incentives-supplier relationship. Consequently, the researcher concluded that incentivizing suppliers could promote their opportunistic behavior, thus undermine their performance at the organization.  

From a different perspective, Poletti-Hughes and Briano-Turrent (1) used the agency theory to explain the effect of gender diversity in addressing organizational risks in family businesses. They focused on whether the inclusion of women influenced the organization’s risk taking tendencies, and whether these tendencies were influenced by independent and non-independent women directors. They wanted to understand the relationship between female directors and corporate risk in Latin American organizations, where women comprised 5% of the board of directors’ membership. Their study revealed that the proportion of independent female directors increased risk venturing but did not influence performance hazard risk, particularly in forms with low risk. Contrastingly, they also found that the proportion of non-independent female directors increased the performance hazard risk in family-run organizations significantly. The concluded that the risk-taking motivation was influenced by the presence of independence and non-independent female directors, organizational ownership structure (family or non-family firms), and the type of risk. 

2.5 Management practices in the United Arab Emirates

United Arab Emirates is attracting business investors with business-friendly and investor-focused policies. Consequently, the rapid establishment of firms across various sectors in the country has led to an increase of people in managerial positions in the country. Although many top organizational executives have been trained in the west, they have had to translate their knowledge to suit the Emirati environment and circumstances. For instance, Budhwar and Mellahi (123) dedicated a whole chapter in their book to the management practices in human resources practice in the United Arab Emirates.  Although they decried the few Emiratis in leadership and managerial position, considering that many of such jobs were taken up by expatriates from highly-developed countries, like Australia, the United States, and the United Kingdom, they noted that the managerial practices of the few in Emiratis were influenced by the Islamic and Arabic cultures. For instance, personal connections (wasta) were critical for securing managerial jobs in the country, sometimes at the expense of expertise, experience, and professional qualification (Budhwar and Mellahi 129). An interesting observation was that the interaction with expatriates and foreign education had reduced the traditional and cultural influences of leaders and managers in firms in the United Arab Emirates. Nonetheless, most Emiratis preferred public jobs because of their better remuneration and working conditions. Budhwar and Mellahi (138) called for more research in the United Arab Emirates because data and information about corporate Emirati leaders was scarce.     

Nuaimi and Jabeen (184) studied the information sharing practices among high performing employees in firms in the United Arab Emirates and found that the managers and leaders of such organizations created a conducive and supportive environment for information and knowledge sharing. This study did not reveal any peculiarities in the management culture in United Arab Emirates’ firms.

2.6 Summary of the literature and research gaps

The review of the literature has addressed several issues related to strategic management theories and particularly the agency theory, its conceptualization, evolution, application in business entities, and impact on firm performance and sustainability. Most of the studies reviewed revealed that there was a scarcity of empirical studies, which pointed towards a methodological deficiency because the studies did not generate primary data to test their theoretical assumptions and assertions. Similarly, the integration of the other strategic theories into the agency theory had not received sufficient research attention because many studies focus on individual studies instead.

Consequently, this study will is an empirical one seeking to generate primary data from individuals that translate strategic management theories, and particularly the agency theory and is associated theoretical frameworks, that would generate empirical evidence of the conceptualization and application of these theories in real-life organizations, using those in the United Arab Emirates as an example of a real setting. Similarly, this study will integrate the various strategic management theories alongside the agency theory to determine their combined influence on organizational development in firms in the United Arab Emirates.  

3.0 Methodology

The methodological approach to be employed by this study can be best explained by the research onion framework advanced by Saunders (Melnikovas 33). According to Sanders, Lewis, and Thornhill (7) research methodology construction is a structured process that involves the delineation of the different stages. In particularly, the methodology of a study starts by explaining the its philosophical foundation before outlining the approach used to develop theory, the methodological choice, strategy, tome horizon and the techniques and procedures of data collection as illustrated in figure 1.

Figure 5. The research onion advanced by Sanders

Source: Melnikovas (33)

3.1 Philosophical foundations of the study

This study is anchored on the interpretivism paradigm of research. This paradigm envisages research as a process of understanding the subjective conceptualization of knowledge from the multiple realities existing in an observable situation. This is because from an ontological perspective, reality is social constructed and continuously evolving as the meanings created change over time. Similarly, the epistemological assumption is that knowledge is relative because it is based in the different meaning created by different people living the same phenomenon. In addition, another assumption is that knowledge is subjective because it is based on the different experiences of diverse people, thus lacking one universal definition and explanation. This is because different individuals experience realities different, which supports the notion that the knowledge and the world should be understood from the different realities it presents to different people.

In this study, the deduction approach to theory development will be employed. Specifically, the researchers will start by considering the existing theory, which in this case the agency theory and is associated strategic management theories like the resource-based view, contingency theory, stakeholder theory, and stewardship theory. The researcher has formulated research questions and hypotheses to inform about the data that needs to be collected to facilitate the confirmation or rejection of the hypotheses and eventually answering the research question.

3.2 Method

Qualitative research is the methodological choice selected for this study. Qualitative research strives to deliver an in-depth understanding of a phenomenon from the lived experiences of individuals. Therefore, it unearths the perceptions about a phenomenon instead of quantifying it in numerical terms. Consequently, qualitative research produces a broad understanding of the meanings created by individuals living through a phenomenon and the perceptions they conceptualize in the process. In this study, deploying strategic management theories in firms in the United Arab Emirates is the phenomenon to be investigated. This phenomenon is lived by leaders and managers of firms in the United Arab Emirates. The lived experiences of the leaders and managers of firms in the United Arab Emirates can be explained from their conceptualization, perceptions, and applications of strategic management theories in their firms. 

3.3 Research design

A cross-sectional study design will be used to define the time horizon for this study. This means that the study will be conducted in a short term across several organizations from the different industries in the United Arab Emirates. Data will be collected at a specific point of time without repeating the process severally. This means that the data collection tools will be deployed once across the different organizations belonging to the different sectors in the United Arab Emirates.

3.4 Research strategy

This section outlines how this study will be conducted based on the aims, objectives and research questions developed by the researcher. In this case, this study uses the survey strategy to collect the diverse views of leaders and managers across the different firms drawn from various industries in the United Arab Emirates. The study also uses the exploratory and descriptive strategies to find out the extent to which leaders and manages of firms in the United Arab Emirates translate strategic management theories, and particularly the agency theory, into practice and describe their perceptions and experiences with the adoption of these theories and the effects they have to the operations and performance of their companies.

3.5 Sample and sampling procedure

The sample will comprise 150 participants. These participants will be drawn from various industries in the United Arab Emirates, specifically, retail, financial, construction, tourism, and manufacturing sectors.

Purposive sampling will be used. The participants will be recruited among individuals in the leadership and managerial positions in various companies in the United Arab Emirates. This is because this group of organizational membership is directly involved in steering the strategic direction of their firms by implementing by organization strategies. They are the ones that translate theory into practice in their organizations and therefore best placed to explain whether they find the agency theory useful for delivering their leadership and managerial mandate. The participant recruitment exercise will be through an invitation made through the forms’ senior management. An email will be broadcasted through the companies’ information systems inviting the leaders and managers in the firms to register their interest in participating in the study. The interested individuals will respond via email indicating their voluntary willingness and their informed consent to participate in the study.    

3.6 Data collection tools

Structured questionnaires and interviews will be administered. The questionnaires will contain items that have statements whose answers will be provided by five choices on a 5-point Likert scale. The questionnaires and interviews will be administered virtually to conform to the public health protocols of social distancing and avoidance of unnecessary travel, considering that the Covid-19 pandemic is ongoing. Besides, the corporate leaders and managers are busy individuals who may not find the time to leave their organization for a meeting convened by a researcher for his or her individual academic pursuits.

The questionnaires will have two sections. The first part will establish the controlling variables from the demographic information derived from the participants. Specifically, this section will determine the industry the organization belongs and the participants’ gender, age, academic qualifications, professional qualifications, position at the firm, years of experience in their current position, and frequency of professional development activities while at the current firm. This information will be unearthed by asking the participants to select the group or response that best describes them and their work aspects at their current firms. The second part will attend to the dependent and independent variables. In this study, the dependent variables will include organizational operations and organizational performance. Similarly, the independent variables will comprise the participants’ familiarity with the agency theory, frequency of application of agency theory to make leadership or managerial decisions, familiarity with other strategic management theories, including the resource-based view, contingency theory, stakeholder theory, and stewardship theory, and the frequency of application of these theories to make leadership and managerial decisions involving subordinates or employees. The questionnaire items in this section will be fashioned as five responses from which the respondents will select based on how best they describe them and their working situation and condition. A sample of the questionnaire items is presented in appendix 1. These questionnaires will be administered online to minimize the disruptions at work for the respondents, considering that they hold important positions and perform critical functions at their firms as leaders and managers, who are unlikely to have time away from their workplaces. The participants can respond to the questionnaires at their convenience, either at work or home, promoting the rate of questionnaire data completeness and response rate. Similarly, the questionnaires will be conducted virtually. The researcher will interview the participants at scheduled times agreed upon between the researcher and interviewee to ensure that the interview time is the most convenient one for the interviewees. The interview will be conducted via telephone and the conversation will be recorded in an audio format. The researcher will attempt to conduct the interview in a conversational format. This means that the interviewer will prompt the interviewing with a series of questions and allow the interviewee to respond freely. However, the interview will paraphrase the responses provided by the interviewee to eliminate any misinterpretations and misconceptions. This approach is expected to eliminate any bias that the interviewer may introduce into the data due to subjectivity. The questions that will guide the questionnaire items and interview prompts are summarized in appendix 1 and 2.

3.7 Data analysis

Statistical and thematic analyses will be used to analyze the data obtained from the data collection tools (questionnaires and interviews). In the statistical analysis, the data from the questionnaires will be coded and fed into a computer program (SPSS) for analysis. The data will be classified into three variables; dependent, independent, and control variables. Descriptive analysis will be conducted to reveals the perceptions of the participants on various issues related to strategic management theory. Statistical tests such as frequencies, correlations, and significant differences between variables will be determined to explain these perceptions. Similarly, the relationship between the dependent, independent, and controlling variables will be determined statistically to help test the hypotheses and enable the researcher to either accept or reject them and eventually answer the research questions.

For the interviews, thematic analysis will be used to unearth the overarching themes related to the various aspects of strategic management theories. The interviews will be recorded and translated into transcripts. Three independent researchers will go through the transcripts to identify the different themes that emerge. They will collate their understanding and interpretation of these themes and produce overarching themes from mutual agreement. This approach will eliminate the bias emanating from the principle researcher.   

3.8 Ethical considerations

The researcher shall maintain the highest standards of ethical research practice already established. The pertinent ethical considerations target two main issues. One issue is about the ethical involvement of the participants and the other is on the ethical treatment of the data obtained from the participants. However, for this study, the researcher will not need to go through the institutional review board (IRB) because no experiments will be conducted on human subjects. However, the researcher will need the consent from the college, participating companies, and the individual participants recruited to this study.

The first ethical consideration is about the ethical involvement of participants and treatment of the information they divulge. The sampled participants will take part in this study voluntarily. They will have to provide their informed consent before being engaged into this study. In this regard, the researcher will inform the participants the focus and importance of the study and its findings and persuade them in the importance of their authentic participation. The research will also inform the participants how their confidentiality and privacy will be protected. For instance, the participants will be discouraged from providing their personal identifiable information such as their names, social security numbers, medical health information, and other such information that is deemed private and confidential. In addition, the participants will be informed of the protection of any information they divulge to prevent it reaching unauthorized individuals and entities. In particularly, the participants will be assured that they information they divulge that is related to their employer and workplaces will not be disclosed to their employers to prevent them from being victimized while ensuring that their jobs remain secure. They will also be assured that they will be free to exit the study at any time they feel uncomfortable or disinterested in the study. They will also be encouraged to be as truthful as possible in the information and responses they provide. In addition, the participating companies will provide the permission to allow their members to participate in this study. The researcher will write to the senior management of the identified firms seeking permission to engage their members in the study. The researcher will inform the companies about the study, its focus, and importance, and how the information divulged by the organizations’ members will be treated and used. The researcher will assure the participating firms that the information obtained from its members will be used for academic purposes only, and therefore will not be used promote or defame the firms in any way.  

The second ethical consideration is the researcher’s ethical approach towards data analysis, interpretation, and reporting. Although this study is a qualitative one based in the interpretivism paradigm, in which the multiple realities of the phenomenon experienced by various participants are socially constructed and subjective, the researcher will strive to remain detached from the study to avoid introducing bias. Consequently, the researcher will engage two assistants to help identify the themes and code them, and to help analyze the data to end in a mutual consensus of the findings. This will help prevent the researcher from introducing personal prejudices and stereotypes into the study.   

3.9 Presentation of findings

The findings from the data analysis will be presented in various forms in the research report. Specifically, the findings from the analysis of the questionnaire data will be presented textual, tabular, and graphical forms. The findings from the thematic analysis of the interview responses will be presented textually, highlighting and explaining the overarching themes that will have emerged.

4.0 Potential contribution to literature

This study is expected to produce valuable insights into the conduct of business and running of organizations in the United Arab Emirates, which has been underrepresented in evidence-based researches. The evidence derived from this study will provide a snippet into business conduct and operations in the gulf region and consequently, inspire further research in firms across the gulf region to augment the existing evidence. Most importantly, this study will provide additional evidence of how the agency theory is influenced by the cultural influences of a Muslim and Arabic organizational setting. It will also augment the available literature of organizational development in non-western setting where most empirical studies have been conducted.  

5.0 Tentative research timeline

The study will be conducted for a period of 6 months. The scheduled timelines are outlined in figure 1, which is Gantt chart illustrating the various research-related activities.

Proposal approval      
Participant recruitment      
Questionnaire administration      
Questionnaire coding and analysis      
Interview coding and analysis      
Literature review      
Report writing      

6.0 Conclusion

This study intends to explore and describe the understanding and the application of the agency theory and its related strategic management theories by leaders and managers in various companies in the United Arab Emirates. The agency theory is a complex theoretical framework that has evolved over time. The contemporary understanding and application of the agency theory, alongside other strategic management theories, may not conform to its original assumptions, that is, the role of principal and agent interest. Consequently, the principal-agent relationship may have transformed significantly over time, as businesses and business environments change, increase in complexity, and principal and agent interest transform. This study has been designed based on the gaps revealed in the literature. Notably, empirical studies in this topic are scarce and have underrepresented developing countries in the gulf region, which is a non-western setting. It is hoped that by conducting and empirical study in the United Arab Emirates contributes valuable knowledge to strategic management theoretical scholarship.

7.0 Appendices

7.1 Appendix 1: Questionnaire

Part A

  1. Select the response that best describes the industry of your organization
  2. Retail [  ], b) technology [  ], c) manufacturing [  ], d) financial services [  ] e) others [  ]
  3. What is your age group
  4. 18-29 years [  ], b) 30-39 years [  ], c) 40-49years [  ], d) 50-59 years, e) 60-69 years, f) 70 years and over [  ].
  5. What is your highest academic qualification
  6. High school diploma [  ], b) college certificate [  ], c) undergraduate degree [  ], d) postgraduate degree [  ], e) doctorate degree [  ]

Part B

Which responses to the statements best describe your work situation and condition at your current firm

Table 1. Working conditions and environment

1I do participate in the formulation of strategies in your company?     
2My relationship with the board of directors at my firm is very cordial     
3My relationship with the employees in my company is very cordial     
4I think that my interests differ significantly from those of my organization     
5I think that my interests sometimes differ from those of my organization     
6I think that my interests and those of my company are equally important     
7I think my company does not promote my interests     
8I feel that employees should not pursue their interests     
9I think the top executives in my company are opportunistic     
10I am very familiar with the agency theory     
11I use the agency theory in decision-making     

 Key: strongly disagree =1, somehow disagree=2, neither agree nor disagree=3, somehow agree=5, strongly agree=5

7.2 Appendix 2: Interview

These questions will be used to prompt a candid conversation between the interviewer and interviewee

  1. Do you participate in the formulation of strategies in your company?
  2. How do you describe your relationship with the board of directors at your firm?
  3. How do you describe your relationship with the employees in your company?
  4. Do you think your interests differ from those of your organization?
  5. Do you think your interests differ from those of the subordinates you lead and manage?
  6. Does your company promote your interests?
  7. Are you familiar with the agency theory and other strategic management theories?
  8. Do you apply the agency theory and other strategic management theories in decision-making?


Works cited

Budhwar, Pawan S., and Kamel Mellahi, eds. Handbook of human resource management in the Middle East. Edward Elgar Publishing, 2016.

Chrisman, James J. “Stewardship theory: Realism, relevance, and family firm governance.” Entrepreneurship Theory and Practice, vol. 43, no. 6, 2019, pp. 1051-1066.

Department of Justice. “Boeing charged with 737 Max fraud conspiracy and agrees to pay over $2.5 billion.” 7 January 2021.

Evans, Samantha, and Dennis Tourish. “Agency theory and performance appraisal: How bad theory damages learning and contributes to bad management practice.” Management Learning, vol. 48, no. 3, 2017, pp. 271-291.

Haruna, T. Mohammed, Mustapha N. Mustapha&, and Musa Ibrahim. “Employee rewards and organizational performance: A review of literature.” Journal of Business and Organizational Development, vol. 11, no. 1, 2019, pp. 1-15.

Hayat, Aamir, Muhammad Azeem, Raheel Nawaz, Dr Asad Afzal Humayon, and Dr Munir Ahmed. “Mediating effect of human capital on organizational culture, teamwork, organizational development and organizational commitment.” Journal of Social Sciences and Humanity Studies, vol. 5, no. 3, 2019, pp. 1-9.

Hoskisson, Robert E., Eni Gambeta, Colby D. Green, and Toby X. Li. “Is my firm-specific investment protected? Overcoming the stakeholder investment dilemma in the resource-based view.” Academy of Management Review vol. 43, no. 2, 2018, pp. 284-306.

Maestrini, Vieri, Davide Luzzini, Federico Caniato, and Stefano Ronchi. “Effects of monitoring and incentives on supplier performance: An agency theory perspective.” International Journal of Production Economics, vol. 203, 2018, pp. 1-34.

Melnikovas, Aleksandras. “Towards an explicit research methodology: Adapting research onion model for futures studies.” Journal of Futures Studies, vol. 23, no. 2, 2018, pp. 29-44.

Mishra, Pavitra. “Green human resource management: A framework for sustainable organizational development in an emerging economy.” International Journal of Organizational Analysis, vol. 25, no. 5, 2017, pp. 762-788.

Nuaimi, Mouza Al, and Fauzia Jabeen. “A study of factors influencing knowledge transfer in organisations in the United Arab Emirates.” International Journal of Knowledge Management Studies, vol. 11, no. 2, 2020, pp. 170-189.

Panda, Brahmadev, and N. M. Leepsa. “Agency theory: Review of theory and evidence on problems and perspectives.” Indian Journal of Corporate Governance, vol. 10, no. 1, 2017, pp. 74-95.

Partyka, Raul Beal. “Supply chain management: an integrative review from the agency theory perspective.” Revista de Gestão, vol. 29, no. 2, 2022, pp. 175-198.

Pearce, A. D., and D. J. Pons. “Defining lean change—Framing lean implementation in organizational development.” International Journal of Business and Management, vol. 12, no. 4, 2017, pp. 10-22.

Poletti-Hughes, Jannine, and Guadalupe C. Briano-Turrent. “Gender diversity on the board of directors and corporate risk: A behavioural agency theory perspective.” International Review of Financial Analysis, vol. 62, 2019, pp. 1-35.

Pouryousefi, Sareh, and Jeff Frooman. “The problem of unilateralism in agency theory: towards a bilateral formulation.” Business Ethics Quarterly, vol. 27, no. 2, 2017, pp. 163-182.

Saunders, M., P. Lewis, and A. Thornhill. Research Methods for Business Students. Pearson Education Limited, 2016.

Sawagvudcharee, Ousanee, and Maurice Yolles. “Conceptual development on strategic management for organizational improvement.” Journal of Social Sciences, Humanities, and Arts, vol. 17, no. 3, 2017, pp. 17-26.

Zogning, Félix. “Agency theory: A critical review.” European Journal of Business and Management, vol. 9, no. 2, 2017, pp. 1-8.

How to place an order?

Take a few steps to place an order on our site:

  • Fill out the form and state the deadline.
  • Calculate the price of your order and pay for it with your credit card.
  • When the order is placed, we select a suitable writer to complete it based on your requirements.
  • Stay in contact with the writer and discuss vital details of research.
  • Download a preview of the research paper. Satisfied with the outcome? Press “Approve.”

Feel secure when using our service

It's important for every customer to feel safe. Thus, at Supreme Assignments, we take care of your security.

Financial security You can safely pay for your order using secure payment systems.
Personal security Any personal information about our customers is private. No other person can get access to it.
Academic security To deliver no-plagiarism samples, we use a specially-designed software to check every finished paper.
Web security This website is protected from illegal breaks. We constantly update our privacy management.

Get assistance with placing your order. Clarify any questions about our services. Contact our support team. They are available 24\7.

Still thinking about where to hire experienced authors and how to boost your grades? Place your order on our website and get help with any paper you need. We’ll meet your expectations.

Order now Get a quote