Guoli Chen of INSEAD assesses top-level managerial contractual design from a long-term strategy perspective.
In order to succeed over the long term, companies must cultivate knowledge assets with deep organisational roots. It is a painstaking process wherein step by step, breakthrough by technological breakthrough, a firm charts a unique route through the maze of the marketplace, which competitors cannot easily imitate. In short, firm-specific knowledge resources are the engine of differentiation, and thus are an essential component of competitive advantage.
There is a conundrum here, however. For CEOs and other senior-level managers, building deep-rooted knowledge assets may also strengthen ties to their current organisation, essentially renderi
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