MANAGERIAL HEGEMONY THEORY Sample Clauses

MANAGERIAL HEGEMONY THEORY. ▇▇▇▇ (1971) argues that boards play a passive role in strategy because their decisions are dominated by the professional managers of the firm. Boards are regarded as tools to support and validate the actions of the management. This theory stems from different factors why directors decline to involve in making strategic decisions. Some of these factors are that management is in charge of the appointment of directors so if directors want to be sure of their future place at the board, they need to be in a good place with the management. Second, directors are co-opted into the organization. To finish, in order to make good decisions, directors need to trust on information provided by the managers of the firm. But managers often leave information behind so effective decisions can’t be made (▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇▇; Hung, 1998).