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Notes n ote s to t h e i n t ro d u c t i o n 1. We find this example being used by both social democrats (Dugger 1989) and communitarians (Etzioni 1993, 1996; Selznick 1992). n ote s to ch a p ter 1 1. Kaysen (1996a:5). 2. Useem (1993, 1996), Davis and Thompson (1994); for Europe, see Baums, Buxbaum, and Hopt (1994). 3. Compared to 8.2 percent from 1991 to 1993 and, more important, to 6.5 percent from 1985 to 1987 (Stevenson 1996). “A Chicago-based employment consulting firm, Challenger, Gray & Christmas, Inc., reported last week that major corporations announced 108,000 layoffs in January [1994], the highest monthly level since it began tracking the figures in 1989” (Lohr 1994). 4. Applebome (1998), citing Harvard economist James Medoff. See Gordon (1996) for the argument that U.S. corporations remain bloated bureaucracies, and real wages keep falling. 5. See Harrison (1994) for a general analysis that anticipated greater competitiveness by large corporations; also Smith and Dyer (1996:55–56) and Calomiris and Ramirez (1996:164–65) for more specific statements. 6. Uchitelle (1999). 7. Kilborn (1999). 8. In reviewing chapters written by social scientists and legal scholars for his collection, Kaysen (1996a:16) notes that if “the quadrivium” of socioeconomic virtue is efficiency, progress, stability, and equity, “the contributors give the corporation high marks for the first two and often regard the last two as not appropriate measures.” 9. The legal scholars who come closest to explaining what the Delaware courts are doing and why are Alan Palmiter (1989), Lawrence Cunningham and Charles Yablon (1994), Edward Rock (1997), and Margaret Blair and Lynn Stout (1999). We discuss their accounts at length in Chapter 13. 10. British management scholars Kay and Silberston note that the term 313 “corporate governance” is relatively recent, emerging 20 or 25 years ago; yet the fact that corporations perform a governance function has been known for generations (1997:49). Anne Carver, a legal scholar at University of Hong Kong, finds the term “governance” being applied first to corporations in 1984, by Robert Tricker (1997:71). Economists Shleifer and Vishny (1997:737) define corporate governance narrowly, as the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment. Why this definition is narrow will become more and more apparent as this book unfolds. 11. This is the central issue that Blair and Stout (1999) and Bratton (1995) see in corporate governance disputes. 12. Kay and Silberston put the matter even better, saying a company is a set of systems and routines and a structure of organization (1997:54–55).“The essence of the company is a structure of internal relationships among the staff, and a collection of external relationships with suppliers.”Blair and Stout (1999) explore a“team production approach” to corporate governance. 13. Coffee (1990), Pound (1993), Davis and Thompson (1994), Useem (1993, 1996), Fligstein (1996), Smith and Dyer (1996). 14. Bruyn traces the term to Mintzberg’s 1983 textbook (1991:79–80, 381 note 37). Legal scholars often use the term “stakeholder” when exploring the points at which the interests of creditors and employees conflict with those of shareholders and management (e.g., Coffee 1990:1499). Japanese managers act on behalf of a stakeholder coalition rather than on behalf of shareholders more exclusively (Kester 1991:75–81). 15. See Morrill (1995) for an ethnographic account of top managers’ interactions at thirteen corporations. 16. Williamson (1985, 1988a, 1988b). This terminology— governance function, production function—is common in both law and economics journals. 17. Compare this approach to that by Nohria and Gulati (1994). 18. See Gregory Mark (1995:74) for the view that “law school historians rarely . . . take the political culture into account in their work on the corporation”; but exceptions he cites are Mark Roe, Herbert Hovenkamp, and James Hurst. For a general statement about the economy and culture, see DiMaggio (1994). 19. See in particular Roy (1997), Butler and Ribstein (1995), Roe (1994), Romano (1993a). 20. See Roy (1997:144–75) on the relative autonomy of corporate law from both social forces and political interests. 21. This is why Patfield (1995) and Freedman (1995) say that unless “society” is clear about what “it” expects corporate law to accomplish, this law will not somehow independently, or automatically, guard society. 22. In Chapter 11 we distinguish limited government from formal democracy. 23. On the fiduciary law tradition, see Sciulli (1999:chap. 5...

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