Agency Relationships in a Brazilian Multifamily Firm

Abstract

This work shows how tenets of agency theory can be linked with institutional analysis to improve their explanatory power in the context of an emerging country such as Brazil. This study assessed the authors’ propositions in a single-case analysis of a Brazilian multiple family firm. The results show that in the initial phase, characterized by less severe agency problems, the firm’s competitive advantage matured, supported by the strong presence of trust derived from an extended family structure. As the company grew in complexity, the informal monitoring mechanisms that characterize collectivist societies allowed agency problems to escalate.