This article suggests that a shift has developed in the ongoing relationship between executives and shareholders with shareholders gaining more power over executives. The power shift has been driven by institutional investors and hostile takeovers and is visible in changing patterns of succession. More executives are being dismissed for poor performance and are being dismissed more quickly following the onset of poor performance. Two potential negative outcomes are a decreased willingness of executives to undertake risky strategies and a decreased ability of executives to build long‐term, trusting relationships with stakeholders, even when these actions would be beneficial to shareholders. © 1995 by John Wiley & Sons, Inc.
ASJC Scopus subject areas
- Management of Technology and Innovation
- Organizational Behavior and Human Resource Management
- Strategy and Management
- Applied Psychology