In its simplest form, ‘agency‘ can be defined as the ability to take action.

We refer to a person’s agency in terms of their capacity to influence the course of events that shape their lives. By extension, we describe organisational agency in terms of the collective capacity of its people and resources to effect changes that benefit stakeholders and/or shareholders.

The broad comparison of these two forms of agency which follows, distinguishes definitional differences, forms of expression, and underlying drivers for each.

A more detailed breakdown of the contrast between characteristics of personal and organisational agency is offered in the next chart. While there are similarities in the way abilities and capacities are described, there are also some noteworthy differences in the approaches used to get things done and make progress.

One of the tensions or dilemmas faced by nonprofit leaders concerns the obligation to create a system of controls (usually under risk management rubrics) that constrain the behaviour of its people on the one hand, while seeking to promote innovation, autonomy, and intrinsic motivation on the other. Calibrating compliance obligations with more entrepreneurial aspirations involves continuous effort, as it differs from person to person. Even for one person, it can vary over time due to a wide range of factors.

A team member’s agency on behalf of the organisation may be affected by their skills profile, personality, training, work environment, personal relationships, difficulties at home, and numerous other factors. None of these feature in strategic, risk, or operational plans approved by the board and management, yet managers and directors need to be sensitive to situational needs if they are to cultivate a productive and supportive culture.

Bandura’s Agency Model

In Albert Bandura’s three-tier agency model, proxy agency sits alongside personal and collective agency (see header image). Proxy agency is invoked when people “influence others who have the resources, knowledge, and means to act on their behalf to secure the outcomes they desire”. In organisational settings we call this delegation, but we also understand it to have legal implications, especially as regards employment and agency laws.

In previous posts I have referred to the notion of organisational ‘personality’, using the metaphor of psychological disposition to characterise different organisational cultures. The concept of human agency can also be used as a metaphor for organisational culture, and Bandura’s agency model allows for this given its inclusion of proxy and collective agency modes, alongside personal agency.

Some of the ways we use proxy agency in our nonprofits will be explored in Part 2 of this series, to follow.

Personal Agency

While mentoring emerging leaders, aspects of personal agency are in focus as we consider the mentee’s strengths profile and opportunities for development. The Four Pillars Model offered by Thomas S. Bateman (see chart below) suggests the key aspects of effective personal agency. These may be used for reflection in mentoring work, but also when planning professional development programs for your team.

Agency Theory

Agency Theory as proposed by economists is one of a variety of organisational theories used to characterise the style and culture of organisations, including nonprofits.

According to agency theory, non-profit board directors are agents of their stakeholders, who are the principals setting the goals to be served. If they were commercial directors, they would be agents of the shareholders who fund the enterprise. Those directors then act as principals when appointing a CEO as their agent to execute the agreed strategy which addresses stakeholder priorities and needs. The CEO then acts as a kind of principal when appointing and managing staff and employees to operationalise the strategy.

This cascading principal/agent model has often been described as problematic because of the inherent conflicts of interest between the principal and the agent. This problem will discussed in Part 2, along with reflections on how agency is addressed by other governance models.

Change agency

Another way agency is referred to, particularly when discussing strategy, is related to the way change is promoted, facilitated, or impeded. Change agents may be inspiring leaders, hands-on planners, facilitators, and executives, or negative forces who seek to block or undermine changes. Whether a person’s change agency profile is positive or negative is likely to depend on whether they agree with the purpose of the initiative, or with the means by which it is being implemented.

One person’s change agent is another’s agent provocateur. Aligning team members’ intentions with the organisational goal is always a key success factor in any strategic initiative. Listening carefully to those who resist change will often reveal important insights about adjustments that will permit successful implementation. Characterising a skeptical team member as a ‘critical friend’ may be one method that helps to bridge the gap between opposition and support.

Part 2 to follow

Having highlighted the Bandura Model and drawn some distinctions between personal and organisational agency in Part 1 of this series, Part 2 considers agency from the perspectives of various disciplines, and explores the roles of agents, proxies, and ‘servants’, chiefly in nonprofit settings.

See also:
Organisational Personality
Ways of knowing and being in organisational culture
Filters and factors in deliberation
Choosing an organisational metaphor? Choose wisely!

Agents, Proxies, and Servants – Agency Part 2