The Stewardship Theory : Lex Donaldson And James H. Davis

Decent Essays

Stewardship can be described as “a concept that has inspired the activities of several organizations whose mission is to preserve, protect, and maintain natural, social and economic assets for the benefit of stakeholders and communities” (Contrafatto, 2014, para. 1). The stewardship theory describes an environment where leaders feel empowered and trusted without the need of working in a controlled and monitored environment. In this type of setting, the leaders and followers work together collectively and have the best interest of the organization, its owners, and stake holders at heart. Managers are committed to the business and gain satisfaction knowing the business is being properly managed and successful.
The two theorists credited …show more content…

The premise behind this theory is that given the opportunity most people will help and support one another. Attributes associated with the stewardship theory include leader’s behaviors being aligned with the objectives of the stakeholders or owners of the organization. Another attribute is the autonomy of the managers and leaders without the threat of overarching domination or power.

This model is based on motivating people by appealing to their higher emotions and principles which leads to serving others. Flynn defines a steward as someone who protects and takes charge of the needs of others. This definition directly partners with the description of stewardship theory whereby organizational leaders are stewards or overseers and will act in the best interests of the business shareholders and owners. With this same concept, the stewardship theory supports an environment in which leaders gain confidence, worth, and satisfaction as they feel trusted and empowered to act as responsible stewards.

Another very important element of the Stewardship Theory is the more relaxed views on the roles of the Chairman of the Board and the Chief Executive Officer. The agency theory supports a specific delineation of the roles to make sure there is not a conflict of interest or an abuse of power such as perks and bonuses which is in stark

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