Show Summary Details

Page of

PRINTED FROM OXFORD HANDBOOKS ONLINE (www.oxfordhandbooks.com). (c) Oxford University Press, 2015. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a title in Oxford Handbooks Online for personal use (for details see Privacy Policy).

date: 13 December 2017

Abstract and Keywords

This article contrasts three views or paradigms of the business enterprise and of critical management issues regarding governance. The first two are the agency and contracting paradigms. These dominate most discussion of the governance of corporate activities. The third is the capabilities perspective, which is starting to gain attention in the literature. Agency theory highlights how incentives should be crafted and governance activities focused to bring about better performance for shareholders when ownership and control are separated. Transaction cost economics highlights, as does agency theory, the importance of opportunism. But it adds asset specificity considerations that are also relevant to organizational design choices, including governance mechanisms. The capabilities perspective focuses less on managing opportunism and more on harnessing and managing opportunity. In that sense, it is closer to the essence of capitalism.

Keywords: agency approach, contracting, capabilities perspective, corporate governance, transaction costs

Access to the complete content on Oxford Handbooks Online requires a subscription or purchase. Public users are able to search the site and view the abstracts and keywords for each book and chapter without a subscription.

Please subscribe or login to access full text content.

If you have purchased a print title that contains an access token, please see the token for information about how to register your code.

For questions on access or troubleshooting, please check our FAQs, and if you can''t find the answer there, please contact us.