The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems

  title={The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems},
  author={Michael C. Jensen},
  journal={CGA: Governance \& Internal Control Systems (Topic)},
  • M. C. Jensen
  • Published 1 July 1993
  • Economics, Business
  • CGA: Governance & Internal Control Systems (Topic)
Since 1973 technological, political, regulatory, and economic forces have been changing the worldwide economy in a fashion comparable to the changes experienced during the nineteenth century Industrial Revolution. As in the nineteenth century, we are experiencing declining costs, increasing average (but decreasing marginal) productivity of labor, reduced growth rates of labor income, excess capacity, and the requirement for downsizing and exit. The last two decades indicate corporate internal… 
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