Articles

Ownership, Organization, and Private Firm's efficient use of resources

R. DURAND, V. Vargas

Strategic Management Journal

2003, vol. 23, n°7, pp.667-676

Departments: Strategy & Business Policy, GREGHEC (CNRS)


The principal-agent theory asserts that public firms' performance is driven by efficient capital and labor markets but is silent about non-listed private companies, which are less permeable to market forces (both capital and labor) than are public companies. We propose and test a 2 × 2 framework distinguishing owner-controlled vs. agent-led firms from firms with a flat vs. multilayer organization. Our findings provide highly contrasted results and raise important issues for further study of private firms


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