Firms switch from a functional structure to a multidivisional structure because greater levels of environmental complexity and uncertainty make it necessary for the firm to develop cooperative relationships with its stakeholders

Research has consistently shown that there is one best way to structure all organizations, regardless of competitive strategy

A CEO may gain power by holding the titles of both CEO and chairman of the board

Hedge funds, as part of the market for corporate control, identify a firm that is underperforming and then invest in it with the goal of improving that firm’s performance

When the new CEO is from inside the firm and a heterogeneous top management team is in place, the strategy may not change, but innovation is likely to continue

For 15 years, Edward was a compensation specialist at a mid-sized firm. He was laid off when the firm experienced financial setbacks. Edward has decided to open his own business as a compensation consultant to small firms. He can expect that his main source of human capital will be a bank line of credit

Agency costs include incentive costs, monitoring costs, enforcement costs, and individual financial losses incurred by principals

RueLim Industries has experienced tremendous growth recently. Two downsides to this expansion have been increased costs and negative environmental effects. If RueLim wants to reduce costs, it would make sense to pursue a corporate-level strategy. But such a strategy could not be used to mitigate the environmental effects of the company’s growth

Effectively managing the firm’s resource portfolio (financial, human, social, and organizational capital) is an important strategic leadership task

The increased use of the market for corporate control has decreased the sophistication and variety of managerial defense tactics that are used in takeovers