A Principal-Agent Approach to the Study of Media Organizations: Toward a Theory of the Media Firm

Abstract

Media organizations are both political and economic actors They have the ability to influence public opinion voting behavior and government policy At the same time they tend to be motivated primarily by profit maximizing goals Agency theory also called the principal-agent approach has been useful for understanding the behavior of individuals in profit seeking organizations as well as individuals in political organizations such as legislatures and regulatory agencies Applying principles from the agency theory framework to the behav ior of individuals at various hierarchical levels of the mass media firm reveals important variables such as monitoring costs individual motivations and im plicit organizational control mechanisms that may significantly impact media content Focusing on these variables can help explain variability in media con tent across different media organizations