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The modern industrial revolution, exit, and the failure of internal control systems (1993)
| Venue: | JOURNAL OF FINANCE |
| Citations: | 930 - 7 self |
BibTeX
@ARTICLE{Jensen93themodern,
author = {Michael C. Jensen},
title = {The modern industrial revolution, exit, and the failure of internal control systems},
journal = {JOURNAL OF FINANCE},
year = {1993},
pages = {831--880}
}
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Abstract
Since 1973 technological, political, regulatory, and economic forces have been changing the worldwide economy in a fashion comparable to the changes experienced during the nineteenth century Industrial Revolution. As in the nineteenth century, we are experiencing declining costs, increaing average (but decreasing marginal) productivity of labor, reduced growth rates of labor income, excess capacity, and the requirement for downsizing and exit. The last two decades indicate corporate internal control systems have failed to deal effectively with these changes, especially slow growth and the requirement for exit. The next several decades pose a major challenge for Western firms and political systems as these forces continue to work their way through the worldwide economy.
Keyphrases
modern industrial revolution internal control system worldwide economy nineteenth century economic force nineteenth century industrial revolution next several decade labor income excess capacity corporate internal control system western firm slow growth political system growth rate major challenge
