Time Horizons of Management Decisions: Causes and Effects

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Abstract
There has been a long debate, with an extensive literature, over the control of the firm: who controls it, and how, and what implications does this have for managerial objectives and performance? It is not too simplistic to describe the argument for the most part as between those who see control by shareholders predominating, with the consequence that profit maximisation is the objective, and those who stress control by managers, leading to some other objective being followed — there being many and various alternatives canvassed (e.g. Marris, 1964; Leibenstein, 1966). In recent years, the partisans of shareholder control have been stressing the scope for it even where there was no single holding, or group of holdings, even approaching a majority of the shares. (For the US, see, among others, the Patman Report (1968) and Mintz et al. (1985); for the UK, see Francis (1980a), and Nyman and Silberston (1978)).

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