This paper discusses some agency theory aspects that apply to the modern supply network. The discussion extends to cover how agency theory influences and affects business relationships in modern industrial supply networks. The underlying correlation between agency theory and the overall supply network performance is investigated by reviewing the existing literature. The paper also overviews a current research in progress, the research is concerned with performance and how it can be improved through reducing risk and improving collaboration in a multi-agent supply network. Flexibility and agency cost are proposed metrics for measuring performance from an organizational, agency perspective. The research main objective is attempting to improve overall multi-agent, supply network performance. The research focuses on how agency problem can detract from the value that a supply network can generate. In conclusion, through the application of agency theory, adjusting things like risk and collaboration in supply network will result in improved relationships between agents. Improved network relationships are expected to improve the overall performance of the network. The performance can be measured by utilizing metrics like flexibility and agency cost.
Alnatour, A. & Gibson, P. (Ed.). (2011). CBEC. UK: Cambridge.