The objective of this article is to analyze interaction justice as an antecedent of agency's commitment, moral hazard and perceived performance in power-asymmetry relationship. The franchise system to study in this research is a good example of power-...
The objective of this article is to analyze interaction justice as an antecedent of agency's commitment, moral hazard and perceived performance in power-asymmetry relationship. The franchise system to study in this research is a good example of power-asymmetry called as principal-agency relationship. Hypotheses based on justice theory, role-script theory and reciprocity norm theory were empirically tested. Major findings in this study as follows: First, principal's interaction justice increase agency's commitment and decrease its moral hazard. Especially interaction justice has more effect on commitment than moral hazard. Secondly, agency's positive attitude called as commitment decrease its moral hazard. So we can say that it is efficient to curb negative behavior by positive attitude. Third, agency's commitment and moral hazard have positive effect on its perceived performance of the relationship. Until now we has studied not principal's behavior but agency's behavior, especially the negative side. Based on these findings we can say that we as a principal don't want agency's negative behavior, we must act according to the justice principle and reciprocity principle.