Governance and Well‐being in Academia: Negative Consequences of Applying an Agency Theory Logic in Higher Education
| DOI | http://doi.org/10.1111/1467-8551.12249 |
| Author | Luis Gomez‐Mejia,Pilar Rivera‐Torres,Michael Nalick,Monica Franco‐Santos |
| Published date | 01 October 2017 |
| Date | 01 October 2017 |
British Journal of Management, Vol. 28, 711–730 (2017)
DOI: 10.1111/1467-8551.12249
Governance and Well-being in Academia:
Negative Consequences of Applying an
Agency Theory Logic in Higher Education
Monica Franco-Santos, Michael Nalick,1Pilar Rivera-Torres2
and Luis Gomez-Mejia3
Cranfield University, Cranfield School of Management, Cranfield MK43 0AL, Bedfordshire,UK, 1University
of Memphis, Fogelman College of Business and Economics, Memphis, TN 38152, USA, 2ZaragozaUniversity,
Faculty of Economics and Business Administration, C/ Gran Via2, 50005 Zaragoza, Spain, and 3Arizona State
University, W.P. Carey School of Business Main Campus, BA 397D, PO BOX 874006, Tempe, AZ 85287-4006,
USA
Corresponding author email: monica.franco@cranfield.ac.uk
This study examines the relationship betweenalter nativeuniversity governance practices
and sta well-being. Specifically,it investigates how people in academic and professional
services roles are managed and how various governance mechanisms such as the use of
performance measures and targets influence their sense of vitality and stress. Drawing
from agency theory and stewardship theory research, the authors expected universities
to align their governance practices to the nature of their employment roles to enhance
well-being. Based on data collected in the UK, the authors find that, for some academic
roles, there is a misalignment between the responsibilities and job demands and the way
institutions govern people in such roles, which is shown to aect their well-being. These
results suggest that well-being responses to governance mechanisms change, depending
on the role an employee performsand the position he or she occupies. Interestingly,these
data suggest that the governance and well-being experiencesof academic leaders are more
closely aligned with those of professional service leaders than with those of academics
without leadership positions. Taking these data together, this investigation notes several
shortcomings in the internal governance practices of higher-education institutions that
can have unexpected consequences and requireclose attention and further research.
Introduction
Management researchers have long recognized
that it is beneficial for organizations to align their
We wish to express our appreciation to Professor Marc
Goergen and the anonymous reviewers for their help-
ful and constructive comments. We also would like to
thank those scholars who read earlier drafts of this pa-
per and made valuable contributions including Geo
Martin, Michael Hitt and the participants of the Strategic
Management Society Conference in Madrid 2014 and the
Academy of Management in Vancouver 2015. The em-
pirical work of this paper was also greatly facilitated by
the Leadership Foundation for Higher Education in the
UK, and the research project ECO2013-48496-C4 =3-R,
funded by the Spanish MECC.
governance practices to the tasks and responsibil-
ities of their employees (Adler and Borys, 1996;
Adler and Chen, 2011; Burns and Stalker, 1961;
Cardinal, 2001; Eisenhardt, 1985; Frey, Homberg
and Osterloh, 2013; Ouchi, 1979; Rousseau,
1978). Scholars have premised this contention
on the notion that the characteristics of an em-
ployee’s work environment (i.e. autonomy, task
identification, variety and feedback) aect the
nature of the employment contract, including its
obtainability and the stated utility of the desired
rewards (Eisenhardt, 1989). As suggested by
Davis, Schoorman and Donaldson (1997), it is
necessary for an organization to synchronize its
governance practices to meet particular conditions
© 2017 British Academy of Management. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4
2DQ, UK and 350 Main Street, Malden, MA, 02148, USA.
712 M. Franco-Santos et al.
of the organization’s employment roles. Failure to
do so can have wide-ranging negative implications
for the employee’s relationship with their organi-
zation (Caldwell et al., 2008; Miller, Wiseman and
Gomez-Mejia, 2002).
While this notion of governance–employee
alignment is endlessly discussed in the manage-
ment literature (Hernandez, 2012), whether this
guidance is observed in public institutions that
have recently transitioned their governance prac-
tices to reflect more of a ‘private sector business-
like’ governance approach, such as the case in
higher education, is uncertain (Kezar and Eckel,
2004). Over the last twenty-plus years, reform-
minded institutions in Western societies have
instigated sweeping institutional changes in the
way universities conduct their internal governance
practices (Birnbaum, 2004; Decramer et al., 2012).
This governance reform movement has long ad-
vocated more ‘accountability’ and ‘transparency’
in public-sector investments for higher education
(Barry, Chandler and Clark, 2001; Burrows, 2012;
Martin, 2012; Zusman, 2005). As a result of
these pressures, a series of government policies
have been implemented in countries such as the
UK (Bryson, 2004), the US (Zusman, 2005), the
Netherlands (Schimank, 2005), Finland (Kallio
and Kallio, 2014; Kallio et al., 2016), Australia
(Field, 2015) and New Zealand (Waitere et al.,
2011).
In most countries, these internal governance
changes have taken place alongside a contentious
debate regarding the role of faculty in higher-
education institutions. Political pressure has
coerced many institutions to adopt measures that
attempt to hold faculty more accountable for
performance in areas such as teaching and schol-
arship. For example, over the last few decades, the
performance of UK faculty has been subject to
national evaluation exercises that use performance
measures and targets (Burrows, 2012; Franco-
Santos, Rivera and Bourne, 2014; Morrish and
Sauntson, 2016; ter Bogt and Scapens, 2012;
Townley, 1997; Willmott, 1995). In the US, the
situation is similar. For instance, the Texas A&M
Board of Regents developed business-like metrics
for faculty productivity, reporting how much
faculty ‘made’ or ‘lost’ for the university by
calculating the number of courses taught, student
enrolment in each course, and the amount of
grant dollars awarded (USA Today, 2013). This
trend towards more measured outcomes across
academia has met fierce resistance. From 2012 to
2013, presidents of 12 of the 35 leading public re-
search universities in the US quit or had been fired
because of performance-related disputes (USA
Today, 2013). However, while such governance
changes have been perceived as controversial, an
increasing number of universities worldwide are
still adopting ‘business-like’ governance practices
that emphasize cost-eectiveness and centralized
control including hard performance measures,
targets and appraisals (Deem, Hillyard and Reed,
2007; McLendon, Hearn and Deaton, 2006;
Milliken and Colohan, 2004; Rhoades 2005;
Sporn, 1999; Toma, 2007).
As a result of these changes, there has been
a polemic debate among academics and policy-
makers regarding their overall eectiveness
(Briner, 2015; McNay, 2015). This type of control-
oriented governance is argued to capture indi-
vidual and department-level performance better
than collegial-oriented governance practices
that historically dominated universities (Deem,
Hillyard and Reed, 2007; ter Bogt and Scapens,
2012). As a consequence of these mandated gover-
nance changes, the traditional collegial approach
characterized by a disbursed or horizontal power
structure, long-term mission and an emphasis
on self-organizing and self-management is being
eroded (Birnbaum, 2004; Shore, 2008; Toma,
2007).
Scholars have begun to question the sound-
ness of this governance transition (e.g. Morrish
and Sauntson, 2016; Prichard and Willmott, 1997;
Townley, 1997; Welpe et al., 2015; Willmott, 1995).
Some have suggested that the stated goal in a cor-
porate setting of maximizing shareholder value
by meeting hard output measures is vastly dif-
ferent from the educational, research and social
fulfilment goals set by universities and their fac-
ulty (Schmidtlein and Berdahl, 2005). Other schol-
ars contend that employment roles of educational
faculty are misaligned with the hard performance
measurement techniques foundin control-oriented
governance practices (Birnbaum, 2004; Kezar and
Eckel, 2004). Our research attemptsto provide fur-
ther insight into this phenomenon. Drawing from
existing governance theories,we investigate the ex-
tent to which people in dierent employment roles
and positions working for UK universities expe-
rience the use of collegial or control governance
practices, and the extentto which these experiences
influence their well-being.
© 2017 British Academy of Management.
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