This paper discusses five common divisional performance measurement methods-cost centers, revenue centers, profit centers, investment centers, and expense centers-and provides the beginnings of a theory that attempts to explain when each of these five methods is likely to be the most efficient....

This classic by the formulators of agency cost theory discusses five common divisional performance measurement methods-cost centers, revenue centers, profit centers, investment centers, and expense centers-while providing a theory that attempts to explain when each of these methods is likely to...

In this testimony to the House Ways and Means Committee on February 1, 1989 (when LBOs and other highly leveraged transactions were under fierce attack by politicians and the media), the author identified "LBO associations" such as KKR and Forstmann Little as a valuable innovation in...

This paper examines the role of the corporate objective function in increasing corporate productivity, social welfare, and the accountability of managers and directors. Because it is logically impossible to maximize in more than one dimension, purposeful behavior requires a "single-valued"...

CEOs and CFOs put themselves in a bind by providing earnings guidance and then making decisions designed to meet Wall Street's expectations for quarterly earnings. When earnings appear to be coming in short of projections, top managers often react by suggesting or demanding that middle and lower...

In this 1990 "Harvard Business Review" classic, the authors begin by correcting a number of widespread misconceptions: Copyright Copyright (c) 2010 Morgan Stanley.

This article, which is based on the author's Presidential address to the American Finance Association in 1993, argues that squeezing out excess capital and capacity is one of the most formidable ongoing challenges facing not only the U.S. economy, but the economies of all industrialized nations....