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Owners vs executives and decisions vs control
Örebro University, Örebro University School of Business.ORCID iD: 0000-0002-2156-680X
2019 (English)In: Corporate Governance : The International Journal of Effective Board Performance, ISSN 1472-0701, E-ISSN 1758-6054, Vol. 19, no 3, p. 458-470Article in journal (Refereed) Published
Abstract [en]

Purpose Some scholars have claimed that CEOs make decisions, while boards of directors control these decisions by applying the concepts of decision management and decision control. These concepts were suggested more than 30 years ago and are still applied in corporate governance research. They are now challenged on the basis of scholarship on corporate governance and management. Design/methodology/approach Corporate governance addresses the authority and responsibility that boards of directors and executives have. Management theory addresses planning and control in corporations. Findings The relationship between the owners (the boards of directors) and the top managers is hierarchical. This paper concludes that owners or boards of directors make decisions on main and strategic goals. Decisions cannot be controlled, but the implementation and outcomes of plans can. The latter is managers' responsibility. The terms "decision management" and "decision control" are undefined and do not describe what takes place in organizations. Originality/value Management theory offers clear definitions of decisions, decision-making and control. The concepts of decision management (initiation and implementation) and decision control (ratification and monitoring) neither properly describe who makes major and strategic decisions nor how and who controls the consequences of these decisions.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2019. Vol. 19, no 3, p. 458-470
Keywords [en]
Board of directors, Corporate governance, Decision control, Decision management, Owners
National Category
Business Administration
Identifiers
URN: urn:nbn:se:oru:diva-71833DOI: 10.1108/CG-04-2018-0158ISI: 000479304900005Scopus ID: 2-s2.0-85064053862OAI: oai:DiVA.org:oru-71833DiVA, id: diva2:1282568
Available from: 2019-01-25 Created: 2019-01-25 Last updated: 2019-11-08Bibliographically approved

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Andersen, Jon Aarum

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CiteExportLink to record
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  • apa
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