Strategic delegation refers to delegation of decision-making to agents, and accompanying organizational design choices, which, under strategic interdependence, serve as commitments that influence interactions with rivals and potentially lead to beneficial outcomes for the delegating party.
The general theoretical model of strategic delegation suggests that principals (e.g., owners, shareholders) may gain from delegating decisions to agents (e.g., managers) whose motivations and incentives differ from those of their principals. That is because delegation to such agents may constitute a commitment that influences competitive interactions with actual and potential rivals. How these competitive interactions unfold, however, depends on the competitive context. Thus, strategic delegation perspective links four constructs: delegation decisions, strategic behavior, competitive interactions with rivals, and performance.