Barry M. Mitnick

Professor of Business Administration and of Public and International Affairs, University of Pittsburgh

Theory of Agency
My research interests center on agency in a variety of institutional settings. I was one of the originators of the theory of agency (1973), including its name and its institutional stream, and am responsible for one of its key logics: Perfect agency is rarely obtained because principals find that the marginal benefits of assuring perfect agency do not exceed the marginal costs of doing so; it just does not pay to make agents be perfect. Thus, because the benefits from securing and assuring perfect agents often fail to exceed the perceived costs of obtaining such agents, social and organizational institutions are structured to manage the resulting dilemmas. In other words, agency is often about the management of imperfection.

The institutional theory of agency then focuses on such major questions as the means by which social and organizational performance failures persist and are managed, the relational dynamics of agent and principal, the strategies used by agents and principals to assess the qualities of their exchange partners, including the credibility of the testaments provided about those qualities, the normative governance of agent-principal relations, the external presentation of and/or reputational manipulation of agency relationships, and many other related questions.

My work first identified the fiduciary norm as a true social norm featured in agency relationships (not only in the context of the fiduciary principle in law), similar to such other social norms as reciprocity, giving, helping, promise-keeping, and so on.

Beginning with the original proposal of a general theory of agency by Mitnick (1973) and by Ross (1973), the theory of agency has now spread across the social sciences and has had applications in virtually every business school discipline. For an account of the origin of the theory of agency and copies of some of the original papers on agency, see my SSRN author page: http://ssrn.com/author=95600 In a recent article in the “Guidepost” series in the Academy of Management Discoveries (Mitnick, 2019) I present a case for additional research on the institutional theory of agency.

Theory of Testaments/Rule of Two
The theory of testaments seeks to understand how decision makers assess the credibility of the presentations made by others about the social world and the nature of their participation in it. Social actors seeking assignment of credibility to their qualities and actions can present reports about the past, claims about the present, and predictions about the future. Social processes of verification of reports, validation of claims, and confirmation of predictions are then applied. But the assessments that occur are not costless, and so participants tend to economize on the “assurance load” attached to these evaluations. In addition, they use rules of thumb such as the requirement that a statement about phenomena be matched by a second independent observation (but not necessarily additional observations, because of the cost) -- which is termed the Rule of Two. The theory can generate explanations regarding a variety of common organizational phenomena.

In general, successful joint action or incorporation in organizational action requires that credible testaments, i.e., statements that produce belief that organizational performance will occur as it is claimed to occur, must accompany the credible commitments that provide rational support for such action.

Wicked Wicked Problems
A working group in the University of Pittsburgh Graduate School of Public and International Affairs consisting of four graduate students and myself have developed several papers addressing what we call wicked wicked problems. These are cycling social problems that add changing moral guidance to the traditional wicked problem cycle in which the action of implementing solutions to social problems generates new problems, preventing closure. We identified a careful definition for the classic “wicked problem” identified somewhat casually in the classic planning literature, developed a new way to graphically depict the cycling as a “wicked wicked walk,” and applied our approach to three developing country contexts and to the Flint, Michigan, lead contamination case. Research from this project will appear in papers and in a planned book. All publications from the project will be jointly authored.

Reputation
In a series of papers on reputation with John Mahon, we examine both the behavioral and the normative underpinnings of the management of reputation by firms. We seek to understand the ways in which social perceptions of performance are enacted, modified, and assigned value. Mahon and I introduce the concept of “reputation-set,” discuss the processes of manipulative reputation-shifting, and introduce the normative principle of reputational optimality or reputational “bliss.”

Social Construction of Organizational Systems
In a series of papers with Robert C. Ryan, we are exploring various aspects of the social construction of organization systems by participants in the face of uncertainty, including how individuals and organizations judge the characters of social settings as credible, and commit to action in such settings.

Dr. Ryan and I published “On Making Meanings: Curators, Social Assembly, and Mashups,” in Strategic Organization in May 2015. This paper argues that institutional theory has three legs: meaning-making, meaning-evangelizing (cf. the literatures on institutional agency/legitimacy/isomorphism), and meaning-applying (cf. the literatures on categories and on sensemaking). But scholars have so far paid insufficient attention, both in theory development and in empirical work, to meaning-making institutions, actors, and logics. In this paper we introduce the creator/curator distinction of actors and logics, and their importance for institutional theory. We also introduce the concepts of social assembly and social mashup.

In other papers, Dr. Ryan and I examine how actors in institutional settings make decisions and commit to actions in the face of uncertainty, and the set of meta-cognitive actions that managers take to add value to a problem-solving organization. In one paper, we look at the means by which organizational routines are adjusted by micro-level managerial interventions (“tiny acts of management”) to adapt appropriately to both new technological demands and to changes in other organizational routines. We suggest that managers work from a portfolio of meta-cognitive analytic processes, and we characterize and sort these approaches.

In a second paper, Dr. Ryan and I develop a model of how organizational participants commit to action, including such steps as gathering perceptions about the social environment, testing the quality of those perceptions, assessing them in the light of commonplace and/or characteristic beliefs held by the observer regarding the context for action, reaching a judgment regarding the credibility of observations and the likely consequences of given actions, and, finally, committing to action. We critically examine the analysis of the Mann-Gulch fire disaster presented by Karl Weick in the light of our model.

In the same stream, my Sumner Marcus Award Address (2015) on “Practical Plagiarism….” at the SIM plenary presented a social constructivist approach to academic plagiarism. The paper identifies a set of social mechanisms that result in plagiaristic behaviors.

Regulation
I have a significant research stream on government regulation and on corporate political activity. My 1980 book The Political Economy of Regulation: Creating, Designing, and Removing Regulatory Forms (Columbia University Press) is considered one of the basic treatises on the area (its definition of regulation is sometimes labeled "classic" by scholars in the area), was translated into Spanish, and is still frequently cited. Reviews of my 1993 book on corporate political activity, Corporate Political Agency: The Construction of Competition in Public Affairs, described it as an essential resource on this topic. I have also published on the differences between public and private organizations.

Business Ethics, Corporate Social Performance, and Market Defects
I am an active researcher in the general area of corporate social performance and business ethics. My December 2000 article in Business & Society on the measurement of corporate social performance won the 2002 best article award sponsored by the International Association for Business and Society and the California Management Review. This annual award is the highest research award in my field.

My theory of integrative ethics shows how the five basic approaches to business ethics that are commonly presented in business education and applied in business ethics research, deontology, utilitarianism, justice, virtue ethics, and rights, can be logically inter-related using a simple systems model. The theory shows the approaches to be logical complements, not substitutes as the pedagogical literature commonly presents them.

I also have a paper introducing a typology of corrupt behaviors in organizations and an article providing a systematic sorting of conceptions of the public interest.

Incentive Systems
In a stream related to my work on the theory of agency, I have a series of papers on incentive systems in organizations, including incentive systems in public policy implementation, incentive failures in organizations in general and in the regulation of nuclear power plants, and in the design of government regulation in general, including the incentives of regulators. One study examined the incentive systems faced by state and federal strip mining regulators.

Experience

  • –present
    Professor of Business Administration and Public and International Affairs, University of Pittsburgh

Honours

Sumner Marcus Award, Social Issues in Management Division, Academy of Management; 2019 Aspen Ideas Worth Teaching Award; Finalist, 2014 Aspen Faculty Pioneer Award; Best Article Award, International Assn. for Business and Society, 2002 (for 2000 publication); Leavey Foundation Award for Excellence in Private Enterprise Education (1982)