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The inverse relationship between means of long‐term economic performance measures of toehold targets and associated investing corporations suggests minority‐level equity holdings may often provide benefits that go beyond the total return provided by dividends and capital appreciation. Like security options, minority investments plausibly limit the downside risk associated with some corporate investment alternatives without limiting the upside potential that can be realized if the toehold target becomes very successful. Thus, a better corporate strategy may be to hold a portfolio of minority‐level equity investments than to hold an option on a mutual fund.

Focuses on sources of capital to an organization, investment and flows of capital within an organization, interaction with markets, the generation of economic returns, and the potential for the creation of value. Illustrates how the creation of value provides benefits to employees, shareholders, and society. Provides numerical illustration of the dollar value of a capital project to employees, shareholders and separately to society. Provides the foundation for understanding concepts such as economic value added, a practical understanding of how economics works, especially in terms of allocation of capital, invested capital, flowing capital, and returns on capital. Traces the creation of value to the markets for goods and services.

The use of covariance structure modeling is explored as a means of moving toward a resolution of the debate over the antecedents of executive compensation. The major strength of this methodology is that it enables researchers to measure the effects of unobserved factors on measured variables. It is suggested that covariance structure modeling is a promising way of studying the effect of institutional isomorphism on executive compensation. The popular business press has questioned repeatedly the justification for and the performance effects of prevailing executive compensation systems (Crystal, 1988; Loomis, 1982; Patton, 1985). These articles argue that executives are more interested in creating wealth for themselves than for stockholders. They also underscore the absence of an obvious link between executive compensation and firm performance. Recent academic research on executive compensation adopts an agency perspective that emphasizes potential conflicts of interest between managers and stockholders. It contends that, in the absence of effective disciplining and monitoring systems, executive compensation plans may direct managers' efforts toward personal wealth enhancement to the detriment of firm value (Baumol, 1958; Berle & Means, 1932). In response, scholars have urged that executive compensation plans contain monetary incentives that only accrue to executives when shareholder wealth is maximized (Kerr, 1985; Rappaport, 1983; Tehranian & Waegelein, 1985). However, designing compensation systems that effectively align the interests of managers and stockholders requires a knowledge of the role and effect of relevant driving forces on compensation. Statistical research on executive compensation has been guided predominantly by a search for tangible, observable determinants (Ciscel & Carroll, 1980), examples of which have been firm size or growth rate (Baumol, 1967; Marris, 1963), inter‐firm and inter‐in‐dustry differences (Coughlan & Schmidt, 1985), and performance (Murphy, 1986). The emphasis on such tangible explanations is not surprising given the overwhelming use of econometric techniques, such as ordinary least squares regression (Ciscel & Carroll, 1980; Finkelstein & Hambrick, 1988), logistic regression (Walking & Long, 1984), time series analysis (Murphy, 1985), and event studies (Brickley, Bhagat & Lease, 1985; Coughlan & Schmidt, 1985; Tehranian & Waegelein, 1985). This paper argues that the focus on tangible, observable variables by compensation researchers is a methodologically ‐ driven practice that constrains theory building and testing. As a result, we may have ignored interesting and relevant theoretical frameworks for the study of executive compensation. We also have overlooked the use of analytical techniques that allow us to examine the role of potentially relevant latent constructs. In this paper, we will describe and illustrate the use of covariance structure modeling for the study of institutional pressures on executive compensation.

In a review of America's capital investment system, Michael Porter concluded that the most critical determinant of competitive advantage is “sustained investment in physical as well as intangible assets, things like employee skills and supplier relationships” (1992: 65). Why supplier relationships? This study measures firm returns associated with one form of interfirm investment—stock blockholdings—and tests how investing firm returns are affected by alternative measures of firm size.

Drawing upon prior work in cognition, organizational learning, strategy, and organization theory, a multi-level, longitudinal account of change in core competence is presented. The central concern addressed is how knowledge passes from “individual” to “organizational,” and how insight present in one part of the organization comes into broader currency. Data from a mature industry firm form the foundation for a depiction of change as a cognitive process involving multiple individuals, groups, and levels within the organization. Speculative propositions and a process model are presented.

This study explains variance in one‐year abnormal returns of corporate stockholder investees. Results indicate that investee abnormal returns are negatively associated with the extent of the corporate stockholder's initial percentage of ownership, but the investee abnormal return is positive when the investee is larger and the firms are contractually related.

This exposition explains how Elementary Theory works and how it has been developed over the last two-and-a-half decades. Both increased scope and heightened precision are covered.

Theoretic methodology is explained. Using that method formal models are constructed analogous to empirical events. Those models predict events, design experiments, and guide applications in the field.

There is a widely held belief in sociology that theory becomes more vague and imprecise as its scope broadens. Whereas broader generalizations are more vague than narrower ones, this exposition shows that abstract theory becomes more precise as its scope broadens.

Here implications and limitations are closely connected. Regarding implications, this exposition shows that scientific explanations and predictions are viable today in sociology but only when exact theory is employed. Regarding limitations, the theory and research included in this exposition make clear why the empiricist search for regularities that dominates sociological research is so very limited in its results.

This exposition demonstrates that theory is the method of all the sciences and in particular the science of sociology.

This chapter on anti-racism struggles applies an anti-racist activist framing, both critically examining and recognising the milestones achieved through centuries of pro-justice and anti-racism struggles. It delves into the arduous journey that the global fight for racial equity has undergone and highlights the significant progress as well as setbacks experienced during this lengthy struggle. The earliest history of the fight against racial oppression and domination goes back to anti-slavery and anti-colonial movements. Scholars have analysed the emergence, development and state of global anti-racism struggles in a variety of ways. I approach this subject from a sociological perspective, highlighting the role of social structures, groups and institutions that have contributed to shaping the outcomes of anti-racist initiatives. While recognising the role of individuals and leading political activists, this chapter emphasises anti-racism as a collective social justice struggle. To do this, I explore various local and global anti-racism endeavours and examine how they may influence discussions on race, racism and racial equity and their evolving trajectories across different societies.

This paper specifies how to construct and validate an instrument based on multi‐item scales for the cataloguing and measurement of managerial and organizational capabilities on the basis of management perceptions. The construction and reduction of the scales have been reinforced by the Delphi and retesting techniques. The use of this methodology was illustrated in a sample of Spanish industrial firms. The paper enhances the value of the instruments for a resource‐based view with regard to the faithful and rigorous measurement of its key concept, distinctive competences. The scales created provide consistent empirical evidence to remove doubts surrounding managerial self‐evaluation, including those arising from problems of self‐esteem and reinforcement effects. In addition, the paper provides empirical evidence to support the predictive ability of distinctive competences on current and long‐term performance variability.

Given the complex association between substance use disorders (SUD), comorbid mental health problems and criminal recidivism in forensic patients, homogenous patient classes can contribute to a refined treatment. This paper aims to construct those classes in forensic patients (N = 286) diagnosed with SUD, unconditionally released between 2004 and 2013 of one of ten Dutch forensic psychiatric centers.

Retrospective data were derived from electronic patient files. Classes were based on the Dutch risk assessment tool, the Historisch Klinisch Toekomst-Revisie (Historical Clinical Future–Revised [HKT-R]) and identified by means of explorative Latent Class Analysis in Latent Gold version 5.1. In a three-step approach, posterior class memberships were related to external variables (i.e. diagnoses, type of drug and type of offence).

Four classes were identified that differ in the risk of recidivism, as well as Axis I and II diagnoses and type of drug consumption.

This study informed on the heterogeneity of forensic patients with SUD and identified four homogenous classes that differ in important variables for the treatment approach. Based on these classes, a more refined treatment approach can be developed. Possible treatment approaches are discussed, but future research is needed to provide evidence.

This study is the first to identify classes within forensic patients with SUD and, therefore, sets the first step to develop a tailored treatment approach based on characteristics informative for treatment.