Theories of dynamic capabilities emphasise the ability of organisations to sense opportunities, seize them, and reconfigure resources to transform the organisation around them. However, attempts to sense, seize and reconfigure increase the risk of major organisational failure. Organisations are...

We derive conditions under which state-imposed limits on executive compensation can enhance efficiency and benefit shareholders (but not executives). Having their hands tied in the future allows a board of directors to credibly enter into relational contracts with executives that are more...