The relationship between ownership and diversification has been the focus of renewed debate between financial economists and strategic management scholars. While financial economists hold that manager-controlled firms tend to reflect higher levels of diversification, strategy researchers argue...

We compare top management compensation among prospector, defender, and analyzer strategic types, and the effects of differences in managers' employment risks, firm performance, and firm size. Prospectors performed better and they paid their top management group more than did analyzers. They were...