Corporate restructuring, ownership-disciplined alignment, and the reorganization of management

Abstract

Intensified focus on shareholder value during the 1980s led to a stress on consistent, integrated linkages among major elements of company organization. Drawing on senior management interviews and documents from six large publicly-traded corporations and six small firms, we argue that this ownership-disciplined alignment devolved decision-making authority into operating business units; contracted headquarters' managers and staff functions; heightened stress on management selection; expanded use of performance-based compensation; and created mechanisms for internal ownership. Changes in each area of managerial organization have appeared before, but they are now explicitly and systematically focused around enhancing shareholder value.