No Fact Check, Pharmaceutical Instituions from Reputed Pune University and Socially Situated and Socially Constituted Agency

Abstract

Recently published work, suggest enriching the under socialized agency perspective with the predictions of the behavioural theory of the firm. They refer to this cross theoretical hybridization as the behavioural theory of corporate governance. Within that framework, they distinguish two main mechanisms that impact on behaviour and actions of actors involved in governance processes in corporations, i.e. the socially situated and socially constituted agency [1,2]. PAT, as an under socialized and actor centric theory, concentrates on examining patterns, according to which individuals voluntarily, however rationally, realize their own goal agendas. They are motivated by self-interest and differential personal risk preferences, as well as are subject to informational and incentive constraints. In effect, PAT governance mechanisms tend to be formal in nature. They take a form of either incentive for managers as agents or means of monitoring/controlling them. They are construed to provide safeguards against such actions of managers, who driven by their self-interest may be potentially deviating from the desired organizational and/or societal outcomes. This unfolds by aligning managerial interests with those of shareholders or disciplining managers as agents. Infuse the agency relationships with the social context. They emphasise that corporate leaders do not operate in the social vacuum. On the contrary, they act in the socially constructed and interpreted reality. In the methodological sense, they enrich the of the individual human action in corporate governance, as posited in PAT, with the social fabric of norms, values and beliefs, and point towards the socio-cognitive processes as actual frames, within which particular board members enact their decision-making processes [3,4].