Power and Politics

Question 1

DEF and REF: corporate governance

Answer 1

Schlepper and Vishnu (1997)

Assures shareholders that managers will strive to achieve outcomes in their interests

Question 2

4 issues of principal-agent problem

Answer 2

• manipulating stock price
• excessive compensation
• excessive risk
• enlarging the company to justify high salaries

Question 3

REF for CEO compensation

Answer 3

Moriarty (2005)

Question 4

In ‘agreement view’ why does independence fail? (3)

Answer 4

• Gratitude (376/S&P 500) had CEOs and chairmen)
• Board’s self-interest
• No reason to favour shareholders

Question 5

In ‘desert view’ what are issues concerning CEO pay?

Answer 5

Pay = contribution to firm’s performance.
- Impossible to feeding truly/
Are CEOS EVEN POWERFUL????

Question 6

REF and DEF: Three perspectives of power

Answer 6

Agency theory - focus on contracts and incentives (Jensen and Meckling, 1976)

Resource dependence - access to resources (Pfeffer and Salanick, 1978)

Stewardship theory - highlights forces for aligning interests (Davis, Schoorman and Donaldson, 1997)

Question 7

REF and DEF: Collective leadership

Answer 7

Raelin (2017)

‘Co-construction of leadership by these involved in any undertaking’

Question 8

5 fears of collective leadership

Answer 8

1. “need” for a figure of authority.
2. disrupts “great man theory”
3. Anglo-American individualism
4. Agitates current power dynamics
5. ‘Standard problems’

Question 9

How to lead collectively?

4

Answer 9

1. Post-conventional thinking
2. “I-it” v. “I-thou” dialogue
3. Systems theory - holacracy and small groups (challenges firm boundaries).
4. Learning. Action based, arising from work itself