This classic by the formulators of agency cost theory discusses five common divisional performance measurement methods-cost centers, revenue centers, profit centers, investment centers, and expense centers-while providing a theory that attempts to explain when each of these methods is likely to...

CEOs are in a bind with Wall Street. Managers up and down the hierarchy work hard at putting together plans and budgets for the next year only to discover that the bottom line falls far short of Wall Street's expectations. CEOs and CFOs are therefore left in a difficult situation; they can...

This paper examines the role of the corporate objective function in corporate productivity and efficiency, social welfare, and the accountability of managers and directors. The author argues that because it is logically impossible to maximize in more than one dimension, purposeful behavior...

This paper discusses five common divisional performance measurement methods-cost centers, revenue centers, profit centers, investment centers, and expense centers-and provides the beginnings of a theory that attempts to explain when each of these five methods is likely to be the most efficient....