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The Impact Of Ownership And Capital Structure On Managerial Motivation And Strategy In Management Buy‐Outs: A Cultural Analysis

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  • Sebastian Green

Abstract

This study examines, from a cultural perspective, owner‐managers’and other stakeholders’interpretations of the partial fusion of ownership and control through high leverage in eight UK management buy‐outs (MBOs). Owner‐control and debt‐control are interpreted as having positive effects on managerial motivation, organizational decision‐making processes and implementation of cost reduction strategies and negative ones on fundamental changes in strategy and acquisition. These interpretations accord broadly with agency theory propositions but show that owner‐managers place less emphasis on wealth incentive effects and more emphasis on the enabling and facilitating roles of collective ownership and the freedom it gives from inappropriate corporate control.

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  • Sebastian Green, 1992. "The Impact Of Ownership And Capital Structure On Managerial Motivation And Strategy In Management Buy‐Outs: A Cultural Analysis," Journal of Management Studies, Wiley Blackwell, vol. 29(4), pages 513-535, July.
    • Handle: RePEc:bla:jomstd:v:29:y:1992:i:4:p:513-535
    DOI: 10.1111/j.1467-6486.1992.tb00676.x
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    Cited by:

    1. Renneboog, L.D.R. & Simons, T., 2005. "Public-to-Private Transactions : LBOs, MBOs, MBIs and IBOs," Other publications TiSEM 3b76799c-591c-4d22-b126-a, Tilburg University, School of Economics and Management.
    2. repec:bla:jomstd:v:47:y:2010:i:s2:p:1561-1589 is not listed on IDEAS
    3. Hans Bruining & Ernst Verwaal & Mike Wright, 2013. "Private equity and entrepreneurial management in management buy-outs," Small Business Economics, Springer, vol. 40(3), pages 591-605, April.
    4. Mike Wright & Nick Wilson & Ken Robbie, 1996. "The Longer-Term Effects of Management-Led Buy-Outs," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 5(3), pages 213-234, Fall.
    5. Bruining, J. & Bonnet, M. & Wright, D.M., 2002. "Management Control Systems and Strategy Change in Buyouts," ERIM Report Series Research in Management ERS-2002-113-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    6. Miguel Meuleman & Kevin Amess & Mike Wright & Louise Scholes, 2009. "Agency, Strategic Entrepreneurship, and the Performance of Private Equity–Backed Buyouts," Entrepreneurship Theory and Practice, , vol. 33(1), pages 213-239, January.
    7. Barrett, Gillian & Dooley, Lawrence & Bogue, Joe, 2021. "Open innovation within high-tech SMEs: A study of the entrepreneurial founder's influence on open innovation practices," Technovation, Elsevier, vol. 103(C).
    8. Bruton, Garry D. & Keels, J. Kay & Scifres, Elton L., 2002. "Corporate restructuring and performance: An agency perspective on the complete buyout cycle," Journal of Business Research, Elsevier, vol. 55(9), pages 709-724, September.
    9. Renneboog, Luc & Vansteenkiste, Cara, 2017. "Leveraged Buyouts : A Survey of the Literature," Discussion Paper 2017-015, Tilburg University, Center for Economic Research.
    10. Baruch, Yehuda & Gebbie, David, 1998. "Cultures of success: Characteristics of the u.k.'s leading mbo teams and managers," Journal of Business Venturing, Elsevier, vol. 13(5), pages 423-439, September.
    11. Lindner, Thomas & Puck, Jonas & Stocco, Giulia, 2023. "Asymmetric risk perception and firm financing in the institutional envelope," International Business Review, Elsevier, vol. 32(3).

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