THE MULTIPLE PRINCIPAL PROBLEM AND THREE-TIER DECISION-MAKING

The multiple principal problem refers to the difficulties organizations face when they have to balance the (competing) interests of multiple stakeholders. The problem negatively affects international and inter-municipal... [ view full abstract ]

The multiple principal problem refers to the difficulties organizations face when they have to balance the (competing) interests of multiple stakeholders. The problem negatively affects international and inter-municipal service delivery, yet we know very little about how organizations can mitigate or solve the multiple principal problem. We suggest that a three-tier decision-making structure that incorporates a middle decision-making tier between shareholders and executive management can be a solution. We offer a theoretical background and illustrate our case with examples from types of inter-municipal cooperation in the Netherlands. We contend that while the theory is promising, more(comparative) research is required, and we suggest a number of avenues for such future research.