Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1017307 | Journal of Business Research | 2015 | 9 Pages |
Abstract
Using resource-based logic as well as stewardship and agency theories, we address a paradox when governing young firms—how to design governance structures to encourage top managers to generate rents while minimizing the threat of rent appropriation. Some corporate governance mechanisms (CGMs) enhance empowerment and encourage managers to generate rents for the firm. But these CGMs may also allow managers to appropriate rents excessively. The solution appears to be combining CGMs that empower managers to generate rents with CGMs that either (a) motivate stewardship behavior or (b) reduce information asymmetry between management and other stakeholders. Our empirical analyses provide substantial support for our predictions.
Keywords
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Authors
Bruce A. Walters, Son A. Le, Mark Kroll,