principal-agent
Hired representative dynamic
Principal-agent describes a relationship where one party (the principal) delegates authority to another (the agent) to act on their behalf.
The concept is central to economics, law, and organizational theory.
The principal-agent problem arises when their interests diverge—an employee might slack off, a manager might pursue personal goals over shareholder value: The CEO's lavish spending illustrated a classic principal-agent conflict.
Transferring responsibility downward
- incentivesRewards prompting action
- moral hazardConsequence-free risk-taking incentive
- contractsEnforceable written agreements
- shareholdersOwners of company stock
managers · monitoring · adverse selection · performance pay · fiduciary · compensation · alignment · self-interest
Rigid administrative system
- votersThose who cast ballots
- politiciansElected government representatives
- elected officialsLeaders chosen by vote
- constituentsParts of a whole
accountability · democracy · representation · officials · mandate · oversight · transparency · lobbying
Licensed legal representative
- representationDepiction or likeness
- authorityPower to enforce obedience
- mandateFormal authoritative directive
- fiduciary dutyObligation to act loyally
power of attorney · proxy · trustee · beneficiary · liability · ratification · third party · binding
delegation
Transferring responsibility downward
- incentivesRewards prompting action
- moral hazardConsequence-free risk-taking incentive
- contractsEnforceable written agreements
shareholders · managers · monitoring · adverse selection · performance pay · fiduciary · compensation · alignment · self-interest · opportunism
bureaucracy
Rigid administrative system
- votersThose who cast ballots
- politiciansElected government representatives
- elected officialsLeaders chosen by vote
constituents · accountability · democracy · representation · officials · mandate · oversight · transparency · lobbying · civil servants
attorney
Licensed legal representative
- representationDepiction or likeness
- authorityPower to enforce obedience
- mandateFormal authoritative directive
fiduciary duty · power of attorney · proxy · trustee · beneficiary · liability · ratification · third party · binding · consent
principal-agentdirect action
Confrontational political tactics
owner-operator · self-representation · do-it-yourself · hands-on · sole proprietorship
principal-agentpeer-to-peer
Serverless network architecture
equal partnership · cooperative · collective ownership · mutual agreement · joint venture
principal, agent, principally, principality, prince, princes, princely, princess, agency