The Debate between the Principal-Agent Model and Organisational Culture Theory - Essay Example

Introduction Both the principal-agent and organisational culture theories have accurately explained the incomplete sovereignty of international organisations. Both have introduced persuasive and credible explanations about the inclination of international organisations to create independent objectives and principles, but both are also unable to present a more comprehensive account of the capability of international organisations to safeguard those objectives when these conflict with the Member States’ interests (Dunne, Kurki, & Smith 2007). This essay therefore argues that even though there are several major dissimilarities between the two international organisation (IO) theories, there are also major similarities or points of agreement. The purpose of this essay is not to argue that it is futile to discuss which is better, organizational culture or principal-agent theory. This essay tries to analyse the strengths and weaknesses of these two theories and from there the author makes a conclusion which between the two theories better explains international organisation behaviour. Determining which is better: Principal-Agent Theory or Organisational Culture Theory? The principal-agent (PA) theory describes linkages entrenched in intricate delegation chains that influence the capacity of the international organisation leader to strive toward their own goals. Theorists mostly view the member states as the ‘principals’ and the international organisation as the ‘agent’. The PA theory can also go deeper the delegation chain to look at the principal-agent ties within international organisations that are specifically helpful in terms of identifying the degree to which IO leaders may understand their tendencies (Barkin 2006). For instance, the PA theory could look at the question of how an IO leader, being the principal, could restructure the organisation, by using supervision and regulatory processes to orient the personnel’s and the management’s behaviour as the agents. As described by Hawkins and colleagues (2006), the capacity of the principal to change or mould the behaviours of agents to generate organisational outcomes consistent with their interests or choices is dependent on the level to which organisational personnel embrace the IO leader’s choices or productively make use of information irregularities to break away from supervision and control. On the other hand, organisational culture theorists have persuasively demonstrated that IOs are actors, with ability to expand and behave in line with autonomous goals and principles that cannot be diminished to the goals and principles of their member states. As stated by this model, the capability of IOs towards independent behaviour originates from their specialist, moral, assigned, legal, and rational power, which gives them capacity to wield power (Hawkins et al. 2006). Common arguments of the organisational culture theory recognise the outer limits enforced by states. Nevertheless, in almost all of the empirical studies the possible conflict between the autonomous objectives of the IOs and outside pressures is avoided by selecting case studies wherein IOs behave autonomously but in accordance to the interests of the states, or case studies wherein IOs behave where states are unsympathetic (Simmons, Carlsnaes, & Risse 2002). As argued by Chorev (2012), no particular consideration is given to the cases that may lead to bigger tensions, wherein IOs are unable to act on state pressures or behave in ways that conflict with the interests of the states. One of the results of such empirical partiality is that, in actual fact, several arguments of organisational culture have a tendency to give too much weight to the authority and autonomy possessed by IOs and deemphasises the effect of external restraints and demands. For instance, the interesting study of Rawi Abdelal on the advancement of capital account liberalisation of the International Monetary Fund (IMF) credibly demonstrates that ideas and efforts originated from “within the management of the Fund itself” (Chorey 2012, 20), yet it prevents the importance of identifying how this form of autonomous behaviour could endure outside resistance, because, as stated in his analysis, the U.S. Treasury Department was apathetic to the actions of the IMF. As stated by Barnett and Coleman (2005), “The virtue of a focus on the characteristics of the organisation for explaining organisational change is also its vice: The emphasis on the organisation can lead to the neglect of the environment” (as cited in Chorey 2012, 20). Therefore, the weakness of the organisational culture theory in relation to the PA theory is not in overplaying the IOs’ autonomy but in disregarding the factors that allow IOs to promote their interests even in the face of outside tensions. Basically speaking, it is likely that IOs do win through clashes with member states, but because organisational culture theorists prevent looking at conflicts, they are not able to explain those trends (Barkin 2006). From the above discussion, it is clear that the PA theory have several advantages over the organizational culture theory. In fact, several IO scholars have adopted the PA theory in order to identify or understand the impacts and provisions of the autonomy of the IO from their member states. What makes PA theory better than the organisational culture theory is that the PA theory is beginning to integrate some of the ontological aspects of the organisational culture theory. PA theorists begin their analysis with the basic fact that IOs have the capability to substantiate autonomy and possibly agency (Barnett & Finnemore 1999). However, this comparison between the PA theory and organisational culture theory calls to mind the realistic account of these two theories as analytical instruments through which to understand the behaviour of international organisations. Comparing the PA theory and organisational culture theory is interesting because they see IOs from conflicting perspectives—specifically, organisational culture theory from the ‘top-down’ and PA theory from the ‘bottom-up’ (Simmons, Carlsnaes, & Risse 2002, 52). Consequently, they have a tendency in actual fact to raise distinctive issues and thus introduce various facets of international organisations. Conclusions The principal-agent theory is better than the organisational culture theory in explaining the behaviour of international organisations because it examines both the external and internal factors surrounding IOs. It accurately discusses the differences between the interests and goals of the principal (IOs) and the agents (member states) and how this inherent conflict of interests is dealt with by IOs. The PA theory clearly explains the idea that it is simpler to sustain international organisations than to eliminate it by referring to the relations within IOs. On the other hand, the organisational culture theory is somewhat ambiguous due to its too much focus on the knowledge and truth, which are very abstract concepts. Unlike the PA theory, organisational culture theory ignores the external environment of IOs, bringing about a partial account of the behaviour of IOs. References Barkin, J 2006, International Organisation: Theories and Institutions, Palgrave Macmillan, New York. Barnett, M. & Finnemore, M 1999, The Politics, Power, and Pathologies of International Organisations, International Organisation, 53(4), 699-732. Chorev, N 2012, The World Health Organisation between North and South, Cornell University Press, New York. Dunne, T., Kurki, M., & Smith, S 2007, International Relations Theories: Discipline and Diversity, Oxford University Press, New York. Hawkins, D., Lake, D., Nielson, M., & Tierney, M 2006, Delegation and Agency in International Organisations, Cambridge University Press, New York. Simmons, B., Carlsnaes, W., & Risse, T 2002, Handbook of International Relations, Sage, London. Read More