To achieve strategic goals, decision-makers (DMs) can align their teams through incentives. However, incentive-based contracting often fails in situations where it is difficult to define or observe outcomes. We explore an alternative approach for DMs to align their team-members: Persuasion in the theory-based view. This approach involves providing new information, or new interpretations, or new theories to influence beliefs and behaviour. We develop and introduce three models of persuasion, each aiming to align a decision-maker's team-members with the formulated strategy. Firstly, information persuasion focuses on the strategic dissemination of information to realign team-members' beliefs with the decision-maker's. Secondly, interpretative persuasion reshapes the interpretation of existing information without changing the underlying theory or beliefs. Finally, theory persuasion involves aligning team-members on a new theory of value. For each model, we provide propositions and conjectures on the conditions under which DMs can successfully persuade or attempt to persuade their team-members. Our work complements agency theory by presenting persuasion as an alternative to incentive-based contracting and conceptualises persuasion as a connecting link between strategy formulation and effective strategy implementation. Lastly, our research addresses a crucial gap in the theory-based view literature — how a decision-maker persuades team-members after coming up with a theory.
