Opportunism

About: Opportunism is a research topic. Over the lifetime, 2030 publications have been published within this topic receiving 97170 citations. The topic is also known as: opportunist.

The Kigyo Keiretsu Organization and Opportunism in the Japanese Automobile Manufacturing Industry

Abstract: This paper contends that the distinguishing feature of the subcontracting system for the manufacture and distribution of auto-parts in the Japanese automobile manufacturing industry can be explained by the opportunism hypothesis of transaction cost theory. Opportunism may arise when the parts-supplier uses its information advantage to obtain more favorable contract terms with the manufacturer. It is argued that in response to this kind of ‘informational opportunism’, the automobile manufacturer institutes a special form of vertical arrangement, called the kigyo keiretsu group. The kigyo keiretsu group consist of an association of vertically related parts-makers held together by a high degree of sales and technological interdependence, by partial stock ownership, by interlocking boards of directors and by long-term contract. This study raises the possibility of mitigating opportunism among the kigyo keiretsu group firms throughout the core automaker's shareholdings of its parts-supplier.

Causes and outcomes of satisfaction in business relationships

Abstract: Purpose – This study includes relationship marketing concepts (i.e. trust, commitment, and satisfaction) as precursors to transaction cost theory outcomes (i.e. specific investments, opportunism, and formalization) which are rarely, if ever, included together. Trust and commitment lead to satisfaction and satisfaction in turn leads transaction cost outcomes. The paper aims to address these issues.Design/methodology/approach – The random sample is 600 small‐ to medium‐sized Norwegian manufacturers. Confirmatory factor analysis and structural equation modelling was used to examine the responses from 212 key informants.Findings – The strongest positive associations are from the relationship marketing portion of the model including trust satisfaction and commitment satisfaction. The highest negative association in the model is satisfaction opportunism. Contrary to predictions, satisfaction did not have a significant association with either specific investments or formalization.Research limitations/implication...

Ritualism, opportunism and corporate disclosure in the New Zealand life insurance industry: field evidence

Abstract: Drawing a framework from Gibbins et al. (1990), uses information collected from field interviews to isolate those factors which influence the voluntary disclosure practices of New Zealand life insurance companies. Interview evidence suggests that voluntary disclosure is a multi‐dimensional phenomenon that is influenced by both firm‐specific antecedents such as company culture and environmental conditions, for example, the state of market competition. Gibbins et al. (1990) refer to these organizational and environmental determinants of corporate disclosure as ritualism and opportunism. The results of this study thus provide important insights into the voluntary disclosure practices of life insurance companies. Also concludes that field‐based research carried out within a sound conceptual framework could make a valuable contribution to the accounting literature and complement the results obtained in studies utilizing more conventional statistical techniques.

Is agency theory self‐activating?

Abstract: This article examines the conditions under which the principal-agent model is self-activating/socially causal. We do so by exploring a principal-agent framework that allows for the possibility that rational agents may hold intrinsic preferences for autonomy in decision making and experience disutility from being monitored. Using a dynamic model of preference formation, we identify conditions under which the principal-agent model is self-activating in that, over time, the introduction of the model in an otherwise efficient monitor-worker relationship leads to the inefficient adoption of the agency model. We also examine the extent to which the agency model is robust when autonomy-preferring agents are introduced into the population. (JEL G30, L20, C72) I. INTRODUCTION As a social science, economics seeks to both explain and influence behavior. This in turn fosters a constructive process of self-assessment of the economic approach to decision making. For example, in examining the effect of exposure to economics and differences in cooperativeness in the Prisoner's Dilemma, Frank, Gilovich, and Regan (1993) report that economics students were statistically more likely to frame the objective of the game in self-interested terms and to refer exclusively to the features of the game itself in explaining their strategy choices, rather than considering issues such as fairness, trust, or social norms. Frey and Meier (2003) offer a more distilled view; they use a nonlaboratory experiment (voluntary student contributions to two university funds), with an eye toward examining whether self-interested students self-select into economics (selection bias) or self-interested behavior is a consequence of indoctrination. Surprisingly, their most significant variable was the study of business economics, which obviated both the self-selection and indoctrination effects. By contrast, those with primary training in political economy exhibited neither effect. In examining a dilemma in which subjects were forced to weigh their commitment to profit maximization against concern for workers who would be fired as a consequence of profit maximization during a time of high unemployment, Rubinstein (2006) found that economics students were statistically more likely to adhere to the profit-maximization criterion. Similarly, Israeli readers of a business daily who had a BA in economics or an MBA laid off more workers in the same survey. One area where economic theory has played a significant role in both framing the issues and training the affected parties is executive compensation, particularly the principal-agent model. Beginning with Berle and Means (1932), agency theorists have recognized the need to overcome problems stemming from the separation of ownership and control in public corporations, for example, Jensen and Meckling (1976). Further, not only are the lessons from the principal-agent model widely taught but its operationalization is also recognized within the popular press as the intellectual foundation for the shareholder value movement within Corporate America, as well as the doubling of the number of chief executives who were offered stock option plans from 1980 to 1994.1 Whether seen as the embodiment of "best practice" or as the impetus for corporate avarice, it cannot be denied that the operationalization of agency theory has revolutionized the culture of Corporate America. Further, Bebchuck and Fried's (2004) finding that the design of compensation schemes creates its own agency problems reinforces the core assumption of opportunistic behavior in agency theory. The principal-agent model is an example of a widely disseminated theory in which those who are exposed to it are expected both to put it into practice and have it practiced on them. Consequently, the model raises expectations about the usefulness and occurrence of incentive-based compensation schemes through its underlying assumptions about agents' opportunism. …