literature United States English original

Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure

Foundational agency-cost article linking ownership structure, managerial incentives, debt, outside equity, and the separation of ownership and control.

Use It For

Use this as the entry point for agency theory and for explaining why company law builds monitoring, voting, fiduciary duties, disclosure, and incentive mechanisms around delegated management.

Teaching Notes

Pair it with stakeholder and stewardship theory so students see that governance theory is not one voice.