1. always maintain top-level control rights, they typically

1.     TheAnalytical Perspective 1.1  DefinitionCorporatecontrol is the right to determine the management of corporate resources ie theright to hire, fire and set the top-level managers’ compensation Fama andJensen (1983a; 1983c). When a bid firm acquires a target firm, the controlrights to the target firm are transferred to the board of directors of theacquiring firm. While corporate boards always maintain top-level controlrights, they typically delegate the right to manage corporate resources tointernal managers.

In this way, the top management of the takeover firm derivesthe right to manage the target company’s resources. 1.2 Managerial competitionViewing at the market forcorporate control as an arena where competing management teams are a subtle butsubstantial transition from a traditional perspective, where financiers andshareholders of shareholders are parties (alone or in combination with others)buy company control and hire and fire management to achieve better use ofresources.In this perspective, competition among management teams for managingresources reduces the difference between maximizing shareholder’s wealth bymanagers and providing mechanisms through economies of scale or other synergiesavailable from combining or reorganizing the control and management ofcorporate resources. Stockholders have no loyalty to existing managers; theyonly choose the highest dollar value offering rather than those presented tothem in markets that work well for corporate controls, including selling atmarket prices to arbitrageurs and anonymous takeover experts. We see the marketfor corporate control, which is often referred to as the takeover market, as amarket where alternative management teams compete for the right of managingcorporate resources. Arbitrageur specialists and acquisitions facilitate thistransaction by acting as an intermediary to appreciate the offer by competingmanagement teams, including responsible managers.

The managerial competitionmodel is not looking at the competing management team as the main activistentity, with stockholders (including institutions) playing a relatively passiverole, but fundamentally