The Modern Corporation Statement on Management

7 Pages Posted: 3 Nov 2016

See all articles by Hugh Christopher Willmott

Hugh Christopher Willmott

City University London - Sir John Cass Business School; Cardiff Business School

Marie-Laure Djelic

ESSEC Business School

Andre Spicer

City University London - Sir John Cass Business School

Martin Parker

University of Leicester

Charles Perrow

Yale University

Derek S. Pugh

The Open University - Business School

J.-C. Spender

affiliation not provided to SSRN

Jean-Pascal Gond

Cass Business School

René ten Bos

Radboud University Nijmegen - Nijmegen School of Management

Armin Beverungen

Leuphana University of Lueneburg

Marta Calas

University of Massachusetts Amherst - Department of Management

Grahame F. Thompson

The Open University - Department of Political Economics

Glenn Morgan

University of Bristol

Stewart R. Clegg

University of Technology, Sydney - School of Management; New University of Lisbon - Nova School of Business and Economics

Brendan McSweeney

University of London, Royal Holloway - School of Management

Pasi Ahonen

Swansea University school of Management

Philip Hancock

Essex Business School, University of Essex

Barbara Czarniawska

University of Gothenburg

Howard Gospel

King's College London - The Management Centre

Tyrone S. Pitsis

Newcastle University

Scott Taylor

University of Birmingham

Christopher Land

Essex Business School

Stevphen Shukaitis

Essex Business School

Ace Volkmann Simpson

PEC University of Technology

Tom Keenoy

Cardiff Business School

Sheena Vachhani

University of Bristol

Laurent Taskin

Université catholique de Louvain

George Cheney

Kent State University

Nicolas Bencherki

State University of New York at Albany

Véronique Perret

Université Paris Dauphine

Florence Allard-Poesi

Université Paris Est - Université Paris Est-Creteil

Florence Palpacuer

Université Montpellier

Juan Espinosa

School of Commerce, Pontificia Universidad Católica de Valparaíso

David Carroll Jacobs

Morgan State University

Joanna Brewis

University of Leicester

Daniel King

Daniel King

Thomas Wainwright

University of Southampton - School of Management

Torkild Thanem

Stockholm University School of Business

Walter Jarvis

University of Technology, Sydney

Casper Hoedemaekers

University of Essex

Jason Glynos

University of Essex

Ian Towers

SRH Hochschule Berlin

Samuel Mansell

University of St. Andrews

Laure Cabantous

Cass Business School, City University London

Bill M. Cooke

Lancaster University - Management School

Richard Marens

Sacramento State University

Iain Munro

University of Newcastle - Business School

Oleg Komlik

Ben-Gurion University of the Negev

Ken Weir

University of Leicester

Simon Lilley

University of Leicester - Management Centre

Ludovic Cailluet

EDHEC Business School - Department of Management & Strategy

Nihel Chabrak

College of Business, United Arab Emirates University

Tony Huzzard

Department of Business Administration, Lund University School of Economics and Management

Ozan Nadir Alakavuklar

Massey University - School of Management

Chris Mowles

University of Hertfordshire

Jonathan Murphy

International Management, Cardiff Business School

Joan Le Goff

Vallorem, Tours School of Management (IAE), Tours

Ruth Slater

University of Central Lancashire

Maria-Carolina Cambre

King’s University College, London ON Canada

Susana Velez-Castrillon

University of West Georgia

Djamel Eddine Laouisset

ALHOSN University

Stuart M Schmidt

Temple University - Fox School of Business and Management

Ismail Erturk

University of Manchester - Manchester Business School

Alan D. Meyer

University of Oregon - Department of Management

Timothy Kuhn

University of Colorado at Boulder

Isabelle Huault

Université Paris Dauphine

Hovig Tchalian

Claremont Graduate University, Drucker School of Management

Thomas Clarke

University of Technology, Sydney

Isabelle Cassiers

Senior Research Associate FNRS

Jean-Pierre Chanteau

Université Grenoble Alpes

Julien Malaurent

ESSEC Business School

David J. Cooper

University of Alberta - Department of Accounting, Operations & Information Systems

Dermot O'Reilly

Lancaster University

Michael Pirson

Fordham University - Gabelli School of Business; Humanistic Management Network; Harvard University

Nidhi Srinivas

The New School

Duarte de Souza Rosa Filho

Federal University of Espirito Santo

Alex Faria

EBAPE/FGV

Raza Mir

William Paterson University

Carolina Serrano Archimi

Aix-Marseille Graduate School of Management-IAE, Aix-Marseille Université

George Cairns

RMIT University

Kevin Tennent

University of York

Daniel Doherty

Middlesex University Business School

Rick Wartzman

Claremont Colleges - Peter F. Drucker Graduate School of Management

Pik Liew

University of Essex - Essex Business School

Vlatka Hlupic

University of Westminster

Annick Bourguignon

ESSEC Business School - Department of Accounting and Management Control

Joe O’Mahoney

Cardiff University

Suhaib Riaz

University of Massachusetts Boston - College of Management

Ismael Al-Amoudi

Grenoble Ecole de Management, Univ Grenoble Alpes ComUE; Cardiff University - Cardiff Business School

Oscar Montiel

Universidad Autonoma de Ciudad Juarez

Steve McKenna

York University

Herman Bosch

Open University, UK

Chris Rees

Royal Holloway, University of London

Emma Bell

Open University, UK

Olivia Kyriakidou

Athens University of Economics and Business

Abby Cathcart

Queensland University of Technology

Rory Rory Ridley-Duff

Sheffield Hallam University - Faculty of Organisation and Management

Lorna Stevenson

University of St. Andrews

Andreas Kornelakis

King's College London

Jeroen Veldman

Date Written: November 2, 2016

Abstract

The rise of modern corporations has been accompanied by an expansion of salaried executives who have replaced owner-managers. With this expansion, the new class of managers/executives came to regard themselves as stewards of large and complex corporations, and not principally or exclusively as agents for the owners. Emerging as a self- styled ‘profession’, there was a continuous debate around the necessity for the corporation to be responsible to the collective and to its stakeholders. During long parts of the twentieth century the professed intent was to balance and synthesize a plurality of interests in order to ensure the long term survival and success of the corporation, pursue national strategic interests, create employment, support networks of suppliers, develop new technology as well as create an adequate or satisfactory return for shareholders.

The rise of agency theory in the late 1970s and early 1980s challenged this understanding of management. Arguing that markets rather than managers provide an efficient allocation of scarce resources, it pushed an agenda in which the corporation had to pursue one single goal – the maximization of shareholder value (MSV) and that managers should be incentivised to respond to (financial) market forces. This idea has today become a highly influential doctrine which infuses senior executive thinking, investors thinking, corporate governance theory and public policy and regulatory decision making. Backed by this belief, many managers now act on the basis of a folk wisdom that shareholders are the only important constituency, which leads them to deliver short-term strategic decisions, high executive remuneration, and offshoring strategies with regard to manufacturing and finance. This comes at the detriment of broader and longer-term perspectives on the purpose of the firm in modern societies and has created worse management and less competitive companies. It is ironic that the obsession with MSV has actually destroyed long-term shareholder value and that it has significantly decreased the average life span of corporations during the past 30 years.

We provide this Summary of certain fundamentals of management in an effort to help prevent analytical errors which can have severe and damaging effects on corporations.

Keywords: Corporate, Governance, Company, Law, Management, Shareholder, Value, Stakeholder, Directors, Board

JEL Classification: M00, M1, M10, M12, L00, L1, L10, L2, L20, L21, L22

Suggested Citation

Willmott, Hugh Christopher and Djelic, Marie-Laure and Spicer, Andre and Parker, Martin and Perrow, Charles and S. Pugh, Derek and Spender, J.-C. and Gond, Jean-Pascal and ten Bos, René and Beverungen, Armin and Calas, Marta and Thompson, Grahame F. and Morgan, Glenn and Clegg, Stewart R. and McSweeney, Brendan and Ahonen, Pasi and Hancock, Philip and Czarniawska, Barbara and Gospel, Howard and S. Pitsis, Tyrone and Taylor, Scott and Land, Christopher and Shukaitis, Stevphen and Simpson, Ace Volkmann and Keenoy, Tom and Vachhani, Sheena and Taskin, Laurent and Cheney, George and Bencherki, Nicolas and Perret, Véronique and Allard-Poesi, Florence and Palpacuer, Florence and Espinosa, Juan and Jacobs, David Carroll and Brewis, Joanna and King, Daniel and Wainwright, Thomas and Thanem, Torkild and Jarvis, Walter Patrick and Hoedemaekers, Casper and Glynos, Jason and Towers, Ian and Mansell, Samuel and Cabantous, Laure and Cooke, Bill M. and Marens, Richard and Munro, Iain and Komlik, Oleg and Weir, Ken and Lilley, Simon and Cailluet, Ludovic and Chabrak, Nihel and Huzzard, Tony and Nadir Alakavuklar, Ozan and Mowles, Chris and Murphy, Jonathan and Le Goff, Joan and Slater, Ruth and Cambre, Maria-Carolina and Velez-Castrillon, Susana and Laouisset, Djamel Eddine and Schmidt, Stuart M and Erturk, Ismail and Meyer, Alan and Kuhn, Timothy and Huault, Isabelle and Tchalian, Hovig and Clarke, Thomas and Cassiers, Isabelle and Chanteau, Jean-Pierre and Malaurent, Julien and Cooper, David J. and O'Reilly, Dermot and Pirson, Michael and Srinivas, Nidhi and de Souza Rosa Filho, Duarte and Faria, Alex and Mir, Raza and Serrano Archimi, Carolina and Cairns, George and Tennent, Kevin and Doherty, Daniel and Wartzman, Rick and Liew, Pik and Hlupic, Vlatka and Bourguignon, Annick and O’Mahoney, Joe and Riaz, Suhaib and Al-Amoudi, Ismael and Montiel, Oscar and McKenna, Steve and Bosch, Herman and Rees, Chris and Bell, Emma and Kyriakidou, Olivia and Cathcart, Abby and Ridley-Duff, Rory J. and Stevenson, Lorna and Kornelakis, Andreas and Veldman, Jeroen, The Modern Corporation Statement on Management (November 2, 2016). Humanistic Management Network, Research Paper Series No. 51/16, Available at SSRN: https://ssrn.com/abstract=2863077 or http://dx.doi.org/10.2139/ssrn.2863077

Hugh Christopher Willmott

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Cardiff Business School ( email )

Cardiff CF10 3EU
United Kingdom

HOME PAGE: http://https://sites.google.com/site/hughwillmottshomepage

Marie-Laure Djelic

ESSEC Business School ( email )

3 Avenue Bernard Hirsch
CS 50105 CERGY
CERGY, CERGY PONTOISE CEDEX
France

Andre Spicer

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Martin Parker

University of Leicester ( email )

University Road
Leicester, LE1 7RH
United Kingdom

Charles Perrow

Yale University ( email )

New Haven, CT 06520
United States

Derek S. Pugh

The Open University - Business School ( email )

United Kingdom

J.-C. Spender

affiliation not provided to SSRN

Jean-Pascal Gond

Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

René Ten Bos

Radboud University Nijmegen - Nijmegen School of Management

Thomas van Aquinostraat 3
P.O. Box 9108
Nijmegen, 6500HK
Netherlands

Armin Beverungen

Leuphana University of Lueneburg ( email )

Scharnhorststraße 1
Wilschenbrucher Weg 69
Lüneburg, 21335
Germany

Marta Calas

University of Massachusetts Amherst - Department of Management ( email )

United States

Grahame F. Thompson

The Open University - Department of Political Economics ( email )

Walton Hall
Milton Keynes, MK6 7AA
United Kingdom

Glenn Morgan

University of Bristol ( email )

United Kingdom

Stewart R. Clegg

University of Technology, Sydney - School of Management ( email )

Room C401A
Corner Quay Street & Ultimo Road
Sydney 2007, New South Wales
Australia
9514 3934 (Phone)
9514 3602 (Fax)

New University of Lisbon - Nova School of Business and Economics ( email )

Campus de Campolide
Lisbon, 1099-032
Portugal

Brendan McSweeney

University of London, Royal Holloway - School of Management ( email )

Egham
Surrey, Egham TW20 8DG
United Kingdom

Pasi Ahonen

Swansea University school of Management ( email )

Haldane Building
Singleton Park
Swansea, SA2 8PP
United Kingdom

Philip Hancock

Essex Business School, University of Essex ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Barbara Czarniawska

University of Gothenburg ( email )

Övre Fogelbergsgatan 6
Gothenburg, 405 30
Sweden

Howard Gospel

King's College London - The Management Centre ( email )

150 Stamford Street
London, SE1 9NN
United Kingdom
44 020 78484121 (Phone)

Tyrone S. Pitsis

Newcastle University ( email )

5 Barrack Road
Devonshire Building
NEWCASTLE UPON TYNE, NE1 7RU
United Kingdom

Scott Taylor

University of Birmingham

Birmingham B15 2TT, Birmingham B15 2TT
United Kingdom

Christopher Land

Essex Business School ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Stevphen Shukaitis

Essex Business School ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Ace Volkmann Simpson

PEC University of Technology ( email )

Sector -12
No Address Available, UT

Tom Keenoy

Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

Sheena Vachhani

University of Bristol ( email )

University of Bristol,
Senate House, Tyndall Avenue
Bristol, BS8 ITH
United Kingdom

Laurent Taskin

Université catholique de Louvain ( email )

Place des doyens, 1
L2.01.01
Louvain-la-Neuve, 1348
Belgium

HOME PAGE: http://Www.uclouvain.be/Laurent.taskin

George Cheney

Kent State University ( email )

Kent, OH 44242
United States

Nicolas Bencherki

State University of New York at Albany ( email )

1400 Washington Avenue
Social Sciences 337
Albany, NY 12222
United States

Véronique Perret

Université Paris Dauphine ( email )

Place du Maréchal de Tassigny
Paris, Cedex 16 75775
France

Florence Allard-Poesi

Université Paris Est - Université Paris Est-Creteil ( email )

61 avenue du Général de Gaulle
Créteil, 940000
France

Florence Palpacuer

Université Montpellier ( email )

Avenue de la Mer Site Richter
163 Rue Auguste Broussonnet
Montpellier, Cedex 2 34090
France

Juan Espinosa

School of Commerce, Pontificia Universidad Católica de Valparaíso ( email )

Avenida Brasil 2950
Escuela de Comercio - UCV
Valparaiso, Valparaiso 2362736
Chile

David Carroll Jacobs

Morgan State University ( email )

1700 E. Cold Spring Ln
Baltimore, MD 21251
United States

Joanna Brewis

University of Leicester ( email )

Daniel King

Daniel King ( email )

Burton Street
Nottingham NG1 4BU, NG1 4LN
United Kingdom

Thomas Wainwright

University of Southampton - School of Management ( email )

Highfield
Southampton S017 1BJ, Hampshire SO17 1BJ
United Kingdom

Torkild Thanem

Stockholm University School of Business ( email )

Universitetsvägen 10
Stockholm, Stockholm SE-106 91
Sweden

Walter Patrick Jarvis

University of Technology, Sydney ( email )

Australia
(61-2) 9419 6835 (Phone)

Casper Hoedemaekers

University of Essex ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Jason Glynos

University of Essex ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Ian Towers

SRH Hochschule Berlin ( email )

Ludwig-Guttmann-Str. 6
Heidelberg, 69123
Germany

Samuel Mansell

University of St. Andrews ( email )

North St
Saint Andrews, Fife KY16 9AJ
United Kingdom

Laure Cabantous

Cass Business School, City University London ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Bill M. Cooke

Lancaster University - Management School ( email )

Bailrigg
Lancaster, LA1 4YX
United Kingdom

Richard Marens

Sacramento State University ( email )

Sacramento, CA
United States

Iain Munro

University of Newcastle - Business School ( email )

Newcastle upon Tyne, NE1 7RU
United Kingdom

Oleg Komlik

Ben-Gurion University of the Negev ( email )

1 Ben-Gurion Blvd
Beer-Sheba 84105, 84105
Israel

Ken Weir

University of Leicester ( email )

University Road
Leicester, LE1 7RH
United Kingdom

Simon Lilley

University of Leicester - Management Centre ( email )

United Kingdom

Ludovic Cailluet

EDHEC Business School - Department of Management & Strategy ( email )

France

Nihel Chabrak

College of Business, United Arab Emirates University ( email )

P.O. Box 15551
Al-Ain
United Arab Emirates

Tony Huzzard

Department of Business Administration, Lund University School of Economics and Management ( email )

Box 117
Lund, SC Skane S221 00
Sweden

Ozan Nadir Alakavuklar

Massey University - School of Management ( email )

United States

Chris Mowles

University of Hertfordshire ( email )

Hertford Herts, SG13 8QF
United Kingdom

Jonathan Murphy

International Management, Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

Joan Le Goff

Vallorem, Tours School of Management (IAE), Tours ( email )

Tours
France

Ruth Slater

University of Central Lancashire ( email )

School of Management
Greenbank Building
Preston, Lancashire PR1 2HE
United Kingdom

HOME PAGE: http://www.uclan.ac.uk/staff_profiles/ruth_slater.php

Maria-Carolina Cambre

King’s University College, London ON Canada ( email )

266 Epworth Avenue
London, Ontario N6A 2M3
Canada

Susana Velez-Castrillon

University of West Georgia ( email )

1601 Maple St
Carrollton, GA 30118-3030
United States
6788394847 (Phone)

Djamel Eddine Laouisset

ALHOSN University ( email )

Alhosn University
Abu Dhabi
United Arab Emirates

Stuart M Schmidt

Temple University - Fox School of Business and Management ( email )

Philadelphia, PA 19122
United States

Ismail Erturk

University of Manchester - Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

Alan Meyer

University of Oregon - Department of Management ( email )

Eugene, OR 97403-1208
United States

Timothy Kuhn

University of Colorado at Boulder ( email )

1070 Edinboro Drive
Boulder, CO 80309
United States

Isabelle Huault

Université Paris Dauphine ( email )

223 Rue Saint-Honore
Paris, 75775
France

Hovig Tchalian

Claremont Graduate University, Drucker School of Management ( email )

825 Stanislaus Cir
1021 North Dartmouth Avenue
Claremont, CA 91711
United States

Thomas Clarke

University of Technology, Sydney ( email )

Haymarket Campus
PO BOX 123 Broadway
Sydney, New South Wales 2007
Australia
+61 2 9514 3479 (Phone)
+61 2 9514 3817 (Fax)

HOME PAGE: http://www.ccg.uts.edu.au

Isabelle Cassiers

Senior Research Associate FNRS

Rue d’Egmont 5
Brussels, 1000
Belgium

Jean-Pierre Chanteau

Université Grenoble Alpes ( email )

France

Julien Malaurent

ESSEC Business School

3 Avenue Bernard Hirsch
CS 50105 CERGY
CERGY, CERGY PONTOISE CEDEX 95021
France

David J. Cooper

University of Alberta - Department of Accounting, Operations & Information Systems ( email )

Edmonton, Alberta T6G 2R6
Canada

Dermot O'Reilly

Lancaster University ( email )

Lancaster LA1 4YX
United Kingdom

Michael Pirson

Fordham University - Gabelli School of Business ( email )

140 West 62nd Street
New York, NY 10018
United States

Humanistic Management Network ( email )

St. Gallen
Switzerland

Harvard University

1875 Cambridge Street
Cambridge, MA 02138
United States

Nidhi Srinivas

The New School ( email )

66 Fifth Avenue
New York, NY 10011
United States

Duarte De Souza Rosa Filho

Federal University of Espirito Santo ( email )

Av. Fernando Ferrari, 514
No. 514, Goiabeiras
Vitória, Espirito Santo 29075
Brazil

Alex Faria

EBAPE/FGV ( email )

Brazil

Raza Mir

William Paterson University ( email )

300 Pompton Road
Wayne, NJ 07470
United States

Carolina Serrano Archimi

Aix-Marseille Graduate School of Management-IAE, Aix-Marseille Université ( email )

3 Avenue Robert Schuman
3 Avenue Robert Schuman,
Aix-en-Provence, 13628
France

George Cairns

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000
Australia

Kevin Tennent

University of York ( email )

Heslington
University of York
York, YO10 5DD
United Kingdom

Daniel Doherty

Middlesex University Business School ( email )

The Burroughs
London, NW4 4BT
United Kingdom

Rick Wartzman

Claremont Colleges - Peter F. Drucker Graduate School of Management ( email )

The Drucker School of Management
1021 North Dartmouth Avenue
Claremont, CA 91711
United States

Pik Liew

University of Essex - Essex Business School ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom
+44 0 1206 873844 (Phone)
+44 0 1206 873429 (Fax)

Vlatka Hlupic

University of Westminster ( email )

309 Regent Street
London, W1R 8AL
United Kingdom

Annick Bourguignon

ESSEC Business School - Department of Accounting and Management Control ( email )

Av Bernard Hirsch
Cergy-Pontoise 95021
France

Joe O’Mahoney

Cardiff University ( email )

Aberconway Building
Colum Drive
Cardiff, Wales CF10 3EU
United Kingdom

Suhaib Riaz

University of Massachusetts Boston - College of Management ( email )

Boston, MA
United States

Ismael Al-Amoudi

Grenoble Ecole de Management, Univ Grenoble Alpes ComUE ( email )

12 Rue Pierre Semard
Grenoble, Cedex 01 38000
France

Cardiff University - Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

Oscar Montiel

Universidad Autonoma de Ciudad Juarez ( email )

Calle Henry Dunant
Ciudad Juarez, Chihuahua 32310
Mexico

Steve McKenna

York University ( email )

Herman Bosch

Open University, UK ( email )

Walton Hall
Milton Keynes, Buckinghamshire MK7 6AA
United Kingdom

Chris Rees

Royal Holloway, University of London ( email )

HOME PAGE: http://www.easyurl.net/chris.rees

Emma Bell

Open University, UK ( email )

Walton Hall
Milton Keynes, Buckinghamshire MK7 6AA
United Kingdom

Olivia Kyriakidou

Athens University of Economics and Business ( email )

Therianou 2 and Katsandoni
Pedion Areos
Athens, 11473

Abby Cathcart

Queensland University of Technology ( email )

2 George Street
Brisbane, Queensland 4000
Australia

Rory J. Ridley-Duff

Sheffield Hallam University - Faculty of Organisation and Management ( email )

City Campus, Pond Street
Sheffield, S1 1WB
United Kingdom

Lorna Stevenson

University of St. Andrews ( email )

North St
Fife KY16 9AJ

Andreas Kornelakis

King's College London ( email )

London
United Kingdom

No contact information is available for Jeroen Veldman

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