Fama and Jensen (1983a, b) describe decision processes as consisting of four steps – initiation, ratification, implementation and monitoring. Further, they introduce the terms ‘decision m
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Get it written →Fama and Jensen (1983a, b) describe decision processes as consisting of four steps – initiation, ratification, implementation and monitoring. Further, they introduce the terms ‘decision management’ and ‘decision control’. Consider a small company (S) operating as a subsidiary of a larger company (L). Suppose that the managers of S are contemplating a major investment. Who will exercise decision management and who will exercise decision control? Why? Does it conform to one of Fama and Jensen’s hypotheses? If yes, how did Fama and Jensen phrase that hypothesis?
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