Turning Agents into Psychological Principals: Aligning Interests of Non-Owners Through Psychological Ownership

Principals who delegate tasks to agents face the perennial challenge of overcoming agency problems. We investigate whether feelings of ownership among senior managers in the absence of formal ownership can align agents' interests with those of principals, thus turning agents into psychological principals. Using a moderated mediation model, we find that psychological ownership is positively related to company performance through the mediating effect of individual-level entrepreneurial behaviour. We also find that the effect of psychological ownership on individual-level entrepreneurial behaviour and, ultimately, company performance is weaker for high levels of monitoring compared to low levels. These findings offer important contributions to agency, psychological ownership, and entrepreneurship literatures.

The Impact of Individual-Level Cultural Perceptions on Entrepreneurial Behavior

Entrepreneurial intention scholars have increasingly been investigating the link between entrepreneurial intentions and behaviour. While a solid empirical link has been confirmed, there is still a lack of in-depth theorizing about the underlying conceptual mechanisms. We address this gap by arguing that individual-level perceptions of cultural practices moderate the relationship between entrepreneurial intentions and behaviour. Investigating a longitudinal sample of 1’511 individuals from 13 countries reveals negative moderation effects of perceptions of power distance and collectivism in society and thus confirms our theorizing. This study provides valuable contributions to literatures of entrepreneurship and international business.