2006 Annual Meetng

An International Meeting of
the American Accounting Association

American Accounting Association
2006 Annual Meeting

August 6–9, 2006
Washington, D.C.


Searching for an Optimum: Employment Contract Design in the case of Strategic Alliances

Sebahattin Demirkan
The University of Texas at Dallas

Irem Demirkan
The University of Texas at Dallas

Abstract: This paper proposes and prescribes what kind of employment contracts must be offered to the manager (agent) of company by the owner (principal) in the case of strategic alliance formation and their subsequent performance implications at different stages of industry life cycles. A set of propositions and a model are suggested mainly based on the industry life cycles. Differing effects of various stages, namely the growth and the mature stages representing the early and the later stages of the industry, on the decision of employment contracts in the formation of a strategic alliance and their performance outcomes are considered.

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