What role does the labor market for top management play in management control?
Understand the Problem
The question is asking about the impact of the labor market for top management on management control, which involves how the dynamics of hiring and compensating top executives influence a company's governance and performance metrics.
Answer
The labor market for top management impacts management control through managerial reputation, CEO turnover, and decision-making.
The labor market for top management plays a role in management control by affecting managerial reputation, influencing CEO turnover and remuneration, and impacting managerial decisions related to risk-taking, capital structure, and investment.
Answer for screen readers
The labor market for top management plays a role in management control by affecting managerial reputation, influencing CEO turnover and remuneration, and impacting managerial decisions related to risk-taking, capital structure, and investment.
More Information
Top management labor markets not only guide compensation and career progression but also serve as a check on managerial behavior by linking performance with career outcomes. Managers are often motivated by these factors to align their actions with company success.
Sources
- The managerial labor market and the governance role - papers.ssrn.com
- Corporate Social Performance and Managerial Labor Market - lebow.drexel.edu
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