Cooperation and competition between owner and manager: A research framework of two-way principal-agent relations

The traditional principal-agent theories can not comprehensively explain the relations between owner and manager of modern companies mainly because these theories stand only in owner´s shoes and discuss the interest maximization of the owner ignoring the interests and role of manager´s intellectual capital. Standing in equal position of owner and manager, this paper discusses the cooperation and competition process between them, and points out that there is a two-way principal-agent relationship between manager and owner, namely both parties are principal and agent. Dividing cooperation course into two stages: contract signing and contract performing stage, this paper establishes interest decision-making models on basis of two-way principal-agent relation between owner and manager, which provides an analytical framework to study the interest segmentation and credit game interaction between the two parties.