The External Control of Organizations.

1. Introduction and Overview. 2. Detecting Influential Observations and Outliers. 3. Detecting and Assessing Collinearity. 4. Applications and Remedies. 5. Research Issues and Directions for Extensions. Bibliography. Author Index. Subject Index.

Regression Diagnostics: Identifying Influential Data and Sources of Collinearity

SECI, Ba and Leadership: a Unified Model of Dynamic Knowledge Creation

Henry Mintzberg, Duru Raisinghani, and Andre Theoret A field study of 25 strategic decision processes, together with a review of the related empirical literature, suggests that a basic structure underlies these \"unstructured\" processes. This structure is described in terms of 12 elements: 3 central phases, 3 sets of supporting routines, and 6 sets of dynamic factors. This paper discusses each of these elements in turn, and then proposes a general model to describe the interrelationships among them. The 25 strategic decision processes studied are then shown to fall into 7 types of path configurations through the model.'

The Structure of "Unstructured" Decision Processes

Corporate governance, chief executive officer compensation, and firm performance

We examine, both theoretically and empirically, top-management compensation in the presence of agency conflicts when shareholders have delegated governance responsibilities to a self-interested Board of Directors (BOD). We develop a theoretical framework that explicitly incorporates the BOD as a strategic player, models the negotiation process between the CEO and the BOD in designing CEO compensation, and considers the impact of potential takeovers by large shareholders monitoring the CEO-BOD negotiations. In equilibrium, internal governance by the BOD and external takeover threats by a large shareholder act as substitutes in imposing managerial control, especially in constraining management's profligacy in awarding equity-based compensation to itself. The model emphasizes factors in the design of compensation contracts that are rarely considered in the literature, such as equity ownership of the largest outside shareholder and the firm's bankruptcy risk. It also provides new perspectives on factors that are often considered in the literature, such as firm size, firm performance, equity ownership of the BOD, and BOD structure. Our empirical tests lend considerable support for our theoretical predictions. Equity ownership of the largest external shareholder, that of the BOD, and the default risk, are strongly negatively related to the size of CEO equity compensation. Consistent with the theoretical model, these factors do not significantly influence the growth of fixed (or non-performance-related) compensation. We also find that the equity ownership of the BOD is more important in managerial compensation control than other BOD related variables, such as BOD size or the proportion of outside directors.

https://www.jstor.org/stable/pdfplus/822545.pdf

Corporate Governance, Takeovers, and Top-Management Compensation: Theory and Evidence

D ECISIONMAKING -choosing one course of action rather than another, finding an appropriate solution to a new problem posed by a changing world is commonly asserted to be the heart of executive activity in business. If this is so, a realistic description and theory of the decision-making process are of central importance to business administration and organization theory. Moreover, it is extremely doubtful whether the only considerable body of decision-making theory that has been available in the past that provided by economics does in fact provide a realistic account of decision-making in large organizations operating in a complex world. In economics and statistics the rational choice process is described somewhat as follows: 1. An individual is confronted with a number of different, specified alternative courses of action. 2. To each of these alternatives is attached a set of consequences that will ensue if that alternative is chosen. 3. The individual has a system of preferences or "utilities" that permit him to rank all sets of consequences according to preference and to chose that alternative that has the preferred consequences. In the case of business decisions the criterion for ranking is generally assumed to be profit. If we try to use this fraim-ework to describe how real human beings go about making choices in a real world, we soon recognize that we need to incorporate in our description of the choice process several elements that are missing from the economic model: 1. The alternatives are not usually "given" but must be sought, and hence it is necessary to include the search for alternatives as an important part of the process. 2. The informnation as to what consequences are attached to which alternatives is seldom a "given," but, instead, the search for consequences is another important segment of the decision-making task. 3. The comparisons among alternatives are not usually made in terms of simple, single criterion like profit. One reason is that there are often important consequences that are so intangible as to make an evaluation in terms of profit difficult or impossible. In place of searching for the "best" alternative, the decisionmaker is usually concerned with finding a satisfactory alternative one that will attain a specified goal and at the same time satisfy a number of auxiliary conditions. 4. Often, in the real world, the problem itself is not a "given," but, instead, searching for significant problems to which organizational attention should be turned becomes an important organizational task. Decisions in organizations vary widely * Graduate School of Industrial Administration, Carnegie Institute of Technology. This is a preliminary report on research carried out under a grant from the Ford Foundation for studies in organization and decision-making. The authors are grateful to the Foundation for its support, to the executives of the company that opened its doors to them, and to colleagues and graduate students who have assisted at various stages of data collection and analysis.

Observation of a Business Decision

Creating effective University-industry alliances: An organizational learning perspective

In this paper we argue that the organization's search for market imperfections reflects the information dispersion in the economy. We describe, within a Bayesian framework, the relative importance of and the mechanisms by which externally- and internally-based informational rents arise endogenously. We argue that, rather than viewing the strategic planning process as one where the firm must pursue only one source of information, search should be viewed as evolving within a dynamically related system; progressing from externally-based to internally-based sources of rent as markets evolve.

Information, market imperfections and strategy

In the previous chapter we illustrated some of the ways that Bayesian analysis can be used in duopoly theory. Duopoly and oligopoly theory is characterized by the fact that an infinite number of models can be generated by assuming different values for the conjectural variations term (Cohen and Cyert 1975; Kamien and Schwartz 1983). No general solution exists and there is no basis, either empirical or theoretical, for preferring one of the models over the other.

Richard M. Cyert

Papers

Corporate Governance, Takeovers, and Top-Management Compensation: Theory and Evidence

Observation of a Business Decision

Creating effective University-industry alliances: An organizational learning perspective

Information, market imperfections and strategy

Multiperiod Decision Models with Alternating Choice as a Solution to the Duopoly Problem