Performance plan adoption and performance: the contingency of ownership structure
Article Abstract:
The effect of performance plan adoption on profitability varies depending on the ownership structure of a company. Owner-controlled companies that implement performance plan are shown to have higher profits compared to companies that are controlled by managers. Performance plans in owner-controlled companies motivate managers to work harder, broaden their judgement and enhance their performance. The effects of performance plans on manager-controlled companies are different since managers are in control of their compensation and jobs, and they are not force to improve the profitability of companies.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 1997
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Factors associated with the use of long-term earnings and market-based compensation plans
Article Abstract:
Businesses that employ long term plans are large companies with diffuse ownership and have tremendous growth earnings. They are also companies that have long term investment and higher opportunity for growth. Adoption of long term plans are being undertaken by large companies in preparation for future problems related to conflict of interest between stockholders and managers. Most companies also prefer to have earnings-based performance plans than market-based long-term plans in situations where stock-returns variability is higher than accounting earnings variability.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 1997
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The effects of management control mechanisms on firm level capital equipment investment
Article Abstract:
A negative correlation exists between capital investment and the use of profit and ROI(net) as responsibility center performance measures. A sample of 38 companies in two industries revealed that utilization of ROI(net) and profit as responsibility center performance measures creates disincentive impact on capital investment. A positive relationship was established between rates of investment and long-run incentive compensation and acknowledged ownership influence in decision making.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 1998
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