Eastern Airlines' bankruptcy illustrates the devastating effect of court-sponsored asset stripping-using creditors' collateral to invest in negative net present value quot;lottery ticketquot; investments-on firm value. During bankruptcy, Eastern's value dropped over 50%. We show that a...

There has been substantial research on both asset restructuring and top management changes. The connection between the two, however, has received little attention. Here, we examine spinoffs as events through which top management is restructured. Our main findings are: 1) both firm-specific human...

A hot growth stock in the 1980s, L.A. Gear's equity fell from $1 billion in market value in 1989 to zero in 1998. For over six years as revenues declined precipitously, management tried a series of radical strategy shifts while subsidizing the firm's large losses through working-capital...

A persistent and puzzling empirical regularity is the fact that many firms adopt conservative financial policies. These quot;under-leveragedquot; firms carry substantially less debt than predicted by dominant theories of capital structure (Graham (2000) and Myers (1984)). This paper examines the...

Academics and practitioners from a wide range of backgrounds agree that bringing about sustainable, productive changes in organizations is difficult. They disagree, however, on why this is the case. Consequently, they disagree on the most effective approaches to analyzing and solving...

This paper examines how compensation systems can facilitate or hinder value creating change in organizations. It draws on ideas and evidence, both old and new, from theory and practice and examines four critical ways in which well-designed compensation systems create value in organizations....

This paper examines the role of financial policy as a catalyst for organizational change. The subject is Sealed Air Corporation, a company with substantial free cash flow that undertakes a leveraged special dividend. While the stock price response to announcement is typical, Sealed Air exhibits...

We analyze Total Quality Management (TQM) from an economic and organizational perspective. We find that TQM is a new organizing technology that is science-based, non-hierarchical, and non-market-oriented. It improves productivity by encouraging the use of science in decision-making and...

Using data from private placement contracts, we analyze relationships between investors and issuers, and their impact on corporate governance and performance. Most investors have a relationship with the issuer pre-placement and many new relationships are formed through the placement agreement....

This article analyzes Total Quality Management as an innovation in organizational technology that can be used by companies to increase the productivity of both labor and capital. As an organizing technology, TQM has three distinguishing features: (1) it is science-based in the sense that...