David Hurst

We now know that the shareholders and the financial industry won that battle for corporate control. In the business schools, the finance function emerged as top dog and the economists began to apply the teachings of their discipline to the firm via organizational economics (agency theory and transaction cost economics). The resulting shareholder value model of the firm has dominated for the last thirty years or so.

The business schools did not change their functional siloed structure (academic tenure makes it very difficult), but a new function called “leadership” emerged and began to grow very fast. If “management” was now all about maximizing shareholder value, then leadership became the dumping ground for all the human concerns in organizations, the aspects of our human nature that didn’t fit into the iron cage of the “rational-agent.” It might not yet be a rigorous discipline, the proponents of leadership studies argued, but at least it was “relevant”.

Like this content? Why not share it?
Share on FacebookTweet about this on TwitterShare on LinkedInBuffer this pagePin on PinterestShare on Redditshare on TumblrShare on StumbleUpon

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.