Assignment 6.
In the 1930s, Berle and Means touched off a debate about the separation of ownership (stockholders) from control (managers). The debate continues today. Contrast the "Chandlerian" view (or, perhaps, hyper-Chandlerian view) of these issues espoused by William Lazonick with the quite different views of Michael Jensen. What do these authors see as the nature and role of management in industrial competitiveness? What is the role of markets (especially financial markets and markets for corporate control)?
Your readings:
Michael Jensen, "The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems," The Journal of Finance 48: 830-80 (July 1993).
William Lazonick, "Controlling the Market for Corporate Control: the Historical Significance of Managerial Capitalism," in Frederick M. Scherer and Mark Perlman, eds., Entrepreneurship, Technological Innovation, and Economic Growth: Studies in the Schumpeterian Tradition. Ann Arbor: University of Michigan Press, 1992, pp. 153-198. (You might also want to see this recent paper in which Lazonick makes basically the same argument.)