Michael C. Jensen

Harvard University | Harvard · Harvard Business School

This workshop is designed to support faculty members in higher education in gaining mastery in the delivery of our course: “Being a Leader and the Effective Exercise of Leadership: An Ontological/Phenomenological Model.” This workshop is for scholars who are graduates of our course who are now interested in teaching the course at their respective i...

We argue here that the four factors we identify as constituting the foundation for being a leader and the effective exercise of leadership can also be seen as the foundations not only for great leadership, but also for a high quality personal life and an extraordinary organization. One can see this as a “value free” approach to values because, 1) a...

This presentation reviews the history of our leadership course created at the Simon School of Business in the years 2004-2008. The course is co-authored by Werner Erhard, Michael Jensen, Steve Zaffron and Kari Granger. The intellectual and pedagogical development of the course continues to the present time.Dean Mark Zupan, who created the opportuni...

This document (compiled by Erhard, Jensen and Granger) includes the first and second of five pre-course reading assignments for a leadership course (“Being A Leader and The Effective Exercise Of Leadership: An Ontological / Phenomenological Model”) developed by Erhard, Jensen, Zaffron and Granger and first taught at the University of Rochester Simo...

There is far too much concern today about the conflicts of interest between people; for example, agency theory (the conflicts of interest between agents and owners) -- a favorite topic of Jensen -- and not enough attention paid to the damage caused by an individual's conflict of interest with himself or herself. We argue here that a large amount of...

There is far too much concern today about the conflicts of interest between people; for example, conflicts of interest between agents and owners - a favorite topic of Jensen - and not enough attention paid to the damage caused by an individual's conflict of interest with himself or herself. We argue here that a large amount of the damage inflicted...

Note that this paper is a copy of the slides presented in a talk for the general public. That talk and this paper present a way of accessing life, living, and who one is for oneself, based on studying masters (e.g., master athletes, master physicists, master physicians, and master educators).Like masters of any specialized area, while masters of li...

The Editors of the "Handbook for Teaching Leadership" say the following in their introductory chapter: “How does one teach leadership in a way that not only informs [students] about leadership but also transforms them into actually being leaders?" (p. XXIV)The sole objective of our ontological/phenomenological approach to creating leaders is to lea...

This paper is the fifth of five pre-course reading assignments for our leadership course. This course was first taught at the University of Rochester Simon School of Business in 2004 working with students, alumni, executives, and faculty from various academic institutions. The course is based on the authors' work over the last ten years in teaching...

The Spanish language version of this paper is available at: http://ssrn.com/abstract=1756285We present a positive model of integrity that, as we distinguish and define integrity, provides powerful access to increased performance for individuals, groups, organizations, and societies. Our model reveals the causal link between integrity and increased...

Slide-Deck Textbook and course materials (1044 pages) for the Leadership Course at Whistler, B.C. Canada, 24 – 31 October, 2012.This leadership course is designed to leave students being leaders and exercising leadership effectively as their natural self-expression – rather than attempting to learn the characteristics, styles, and skills of notewor...

What follows are links to the four pdf files that contain the 5 Pre-Course readings for our leadership course "Being A Leader and The Effective Exercise Of Leadership: An Ontological/Phenomenological Model" to be taught June 26-28 and July 1-3, 2013 at the University of British Columbia, Point Grey Campus in Vancouver, Canada. The intention of the...

This presentation given at the University of British Columbia (entrepreneurship@UBC) is available on video at the following location: http://vimeo.com/65658787 The presentation is based on my colleagues (Werner Erhard, Michael Jensen and Steve Zaffron) and my research program over the last nine years in which our objective has been to rigorously di...

A large amount of the damage inflicted on people and organizations is caused by actions of individuals that are not in their own self interest. That is, each and every person consistently imposes costs on themselves, their loved ones, friends, associates, partners, employers, employees, and the public by actions that are not in their own self inter...

We argue here that the four ways of being we identify as constituting the foundation for being a leader and the effective exercise of leadership can also be seen as the foundations not only for great leadership, but also for a high quality personal life and an extraordinary organization. One can see this as a “value free” approach to values because...

The seemingly never ending scandals in the world of finance with their damaging effects on value and human welfare argue strongly for an addition to the current paradigm of financial economics. We summarize here our new theory of integrity that reveals integrity as a purely positive phenomenon with no normative aspects whatsoever. Adding integrity...

The preliminary Slide Deck for the CCL Workshop, Toronto, CA July 2013 is now available for download here. It covers the entire four days of the Workshop.The complete set of course materials will be available at a URL that will be posted here in 30 to 60 days when it is finished.Michael C. Jensen, for the instructor team.Posted Wed, Jul 24, 2013 3:...

The Slide-Deck Textbook through Day 6 is now available for Download.Thu, Jul 4, 2013, 8:40 am. Please hit the download button and the file will be available to you.The complete course materials will be available for you to download no later than September 15, 2013. When that happens this url will not contain a downloadable pdf file and the url of t...

Werner Erhard and Professor Michael C. Jensen gave this presentation at New York University’s Jack H. Skirball Center for the Performing Arts, New York, NY, USA on 5 November, 2013. The presentation was sponsored by Landmark Worldwide.Erhard and Jensen explored a groundbreaking access to leadership available in their semester-long leadership course...

In this paper we argue that the four ways of being that we identify as constituting the foundation for being a leader and the effective exercise of leadership are not only the foundation for great leadership, but also the foundation for an extraordinary organization and the foundation of a high quality personal life. One can also see this as a “val...

These slides for the entire 6 days of the course were posted at 6:57 pm on Thurs, Nov. 1.Enjoy.Mike

The English language version of this paper is available at: http://ssrn.com/abstract=1263835 Diapositivas acumuladas y actualizadas para el curso de la Fundación Universitaria Monserrate. Este juego de diapositivas contiene todas las diapositivas utilizadas hasta ahora en el curso. El juego completo incluirá una tabla de contenido y todos los ejerc...

There is far too much concern today about the conflicts of interest between people; for example, conflicts of interest between agents and owners - a favorite topic of Jensen - and not enough attention paid to the damage caused by an individual's conflict of interest with himself or herself. We argue here that a large amount of the damage inflicted...

This Is the up-to-date cumulative slide deck for the Geisel Medical School Being A Leader course as of the end of Day 6. This deck contains all slides used in the course plus some that were not used because of time constraints. It contains 832 pages. The full and complete set of course materials (that will include a Table of Contents and all course...

In this paper, we show how the Eigenfactor(R) score, originally designed for ranking scholarly journals, can be adapted to rank the scholarly output of authors, institutions, and countries based on authorlevel citation data. Using the methods described herein, we provide Eigenfactor rankings for 84,808 disambiguated authors of 240,804 papers in the...

La versión en Inglés de este artículo está disponible en: http://ssrn.com/abstract=1511274 Existe una confusión entre integridad, moralidad y ética. Mis coautores, Werner Erhard, Steve Zaffron y Yo, en nuestro documento "Integridad: Un modelo positivo que incorpora los fenómenos normativos de moralidad, ética y legalidad" (disponible en http://ssrn...

The English language version of this paper is available at: http://ssrn.com/abstract=1585976 Este documento es el sexto de seis lecturas previas de nuestro curso "Ser un Líder y el Ejercicio Efectivo del Liderazgo: Un Modelo Ontológico Fenomenológico." Parte del material presentado en este curso está basado o es derivado de los programas de Consult...

The relations between managers and board members and capital markets are, with few exceptions, characterized by the well-known “earnings management game” in which corporate officers regularly take actions to meet or beat analyst and market expectations for earnings or certain key performance benchmarks. These actions are associated with manipulatio...

CEO pay is both highly complicated and highly controversial. And while there are problems in many CEO pay systems, much of the controversy can be attributed to ignorance and misunderstanding. More importantly the public policy and private solutions to these perceived problems have historically created more problems than solutions to inadequacies in...

Introduction Different organizational forms are distinguished by the characteristics of their residual claims on net cash flows, for example, restrictions on the extent to which residual claimant status is separable from decision roles, or restrictions on the alienability of the residual claims. Different restrictions on residual claims imply diffe...

Risk arbitrage involves the purchase of a target firm’s shares on the announcement of a merger or tender offer. These transactions provide a risky profit opportunity when the price of the target is below the risk-adjusted expected value of the final takeover price. This article explores the role of arbitragers in the merger and acquisition of firms...

This interview is Part 2 of a two-part series (which series contains 2 pdf files of the transcripts and 4 videos) in which Professor Ralph Walkling, the Stratakis Chair in Corporate Governance and Executive Director of the Center for Corporate Governance at Drexel University, interviews Professor Michael C. Jensen, Jesse Isidor Straus Professor of...

This is a draft of the first 32 pages of our forthcoming book to be published by Cambridge University Press.Each time we progress with the draft, we will post that updated version at http://ssrn.com/abstract=1906328. This URL is for private distribution only so that we can receive comments, criticisms and suggestions from those to whom we send the...

Almost all CEO and executive bonus plans have serious design flaws that limit their benefits dramatically. Such poorly designed executive bonus plans destroy value by providing incentives to manipulate the timing of earnings, mislead the board about organizational capabilities, take on excessive (or insufficient) risk, forgo profitable projects, an...

What follows are links to:1) The four pdf files that contain the 6 Pre-Course readings,2) The full course materials (795 pages) for our leadership course "Being A Leader and The Effective Exercise Of Leadership: An Ontological/Phenomenological Model" last taught in November 2011 at Panchgani, India, 3) The Slide Deck for the Introductory Seminar to...

We argue here that the three factors we identify as constituting the foundation for being a leader and the effective exercise of leadership can also be seen as the foundations not only for great leadership, but also for a high quality personal life and an extraordinary organization. One can see this as a “value free” approach to values because, 1)...

This presentation is based on our research program over the last seven years in which our objective has been to rigorously distinguish leader and leadership and to create a technology for providing access to being a leader and exercising leadership effectively (in short, a technology for reliably creating leaders). Our research program involves not...

The TEMPORARY Slide deck is no longer available.The FINAL and complete version of the Panchgani Course materials (including the course evaluations, course assignments, and PDF of the Slide-Deck Textbook) is now posted at the permanent SSRN home for the full course Materials. Click on the URL below to go there and download the complete 795 page PDF...

For the most up-to-date version of the Pre-Course readings go to the following publicly available directory to download them.http://ssrn.com/abstract=1588288Thank you,Michael C. JensenMonday, May 9, 2011

We argue here that the three factors we identify as constituting the foundation for being a leader and the effective exercise of leadership can also be seen as “A ‘Value-Free’ Approach to Values” that proves to be very effective in allowing students to acquire the foundations not only for great leadership, but also for a high quality personal life...

The English language version of this paper is available at: http://ssrn.com/abstract=1542759Este documento es una versión abreviada de nuestro trabajo mucho más extenso, con el mismo título, disponible en: http://ssrn.com/abstract=920625. Esta versión abreviada del documento no incluye todos los aspectos tratados en este extracto y resumen del docu...

Finance theory and practice are incomplete without an integrated theory of integrity. Following Erhard, Jensen and Zaffron (2007) I define integrity without reference to morals, values, religion, or ethics. Something is in integrity if it is whole, complete and sound. Integrity is closely related to workability because an entity or system that is o...

This interview is Part 1 Video 2 of a two-part series (contained in 4 videos) in which Professor Ralph Walkling, the Stratakis Chair in Corporate Governance and Executive Director of the Center for Corporate Governance at Drexel University, interviews Professor Michael C. Jensen, Jesse Isidor Straus Professor of Business Administration, Emeritus, o...

“The committee is therefore unable to draw conclusions, based on scientific evidence, on what does or does not work to enhance organizational performance” Committee on Techniques for the Enhancement of Human Performance of the U.S. National Research Council Commission on Behavioral and Social Sciences and Education (Druckman et al. 1997)size = 1> T...

This is a draft of the slides used for the presentation on Sat. Aug. 7 at the Academy of Managiment Meetings in Montreal.Check back in a week or two for a more polished deck with the readings, and a Table of Contents, etc.Acknowledgement: We are indebted to Prof. Kati Takacs Haynes, Texas A&M University, Mays Business School who was instrumental in...

This workshop is designed to support faculty members in gaining mastery in the delivery of our new course: “Being A Leader and the Effective Exercise of Leadership: An Ontological/Phenomenological Model”. The Workshop was delivered at the United States Air Force Academy (July 13-16, 2010), and was sponsored by the Kauffman Foundation, the Gruter Fo...

Slide deck for Mays School of Business Version of the Leadership Course. June, 2010. Slides for all 6 days of the course.These slides will be updated daily as the course progresses. And a full and complete version with abstract and Table of Contents will be uploaded by July 15, 2010.

La versión en español de este documento se puede encontrar: http://ssrn.com/abstract=2134114 This document (compiled by Erhard, Jensen and Granger) is the first, second and third of six pre-course reading assignments for an experimental leadership course ("Being A Leader and The Effective Exercise Of Leadership: An Ontological Model") developed by...

CEOs and CFOs put themselves in a bind by providing earnings guidance and then making decisions designed to meet Wall Street's expectations for quarterly earnings. When earnings appear to be coming in short of projections, top managers often react by suggesting or demanding that middle and lower level managers redo their forecasts, plans, and budge...

An Actionable Pathway To Dramatic Increases In Individual And Organizational Performance.Full Day Workshop taught at Olin School, Washington University, St. Louis, MO. Workshop Objectives: To provide you and your organization(s) an unambiguous and actionable access to the causal link between integrity and superior performance, quality of life, valu...

This paper examines the role of the corporate objective function in increasing corporate productivity, social welfare, and the accountability of managers and directors. Because it is logically impossible to maximize in more than one dimension, purposeful behavior requires a “single-valued” objective function. Two hundred years of work in economics...

In this 1990 Harvard Business Review classic, the authors begin by correcting a number of widespread misconceptions: With the aim of reversing these trends, the authors offered three recommendations: Since publication of this article in 1990, the first and third of these goals have largely been accomplished (while the second has proved more elusive...

A small group of academics and practitioners discusses four major controversies in the theory and practice of corporate finance: Copyright Copyright (c) 2010 Morgan Stanley.

Note: SSRN is experimenting with enabling the distribution of different types of files: slides, spreadsheets, video, etc. We are interested in our users desires to distribute files that go beyond word processing text files. You can communicate with Michael Jensen on these issues via his email address below. SSRN invites you to submit your own prese...

The Erasmus Course Materials are now available at the following publicly available URL on SSRN.FOR THE FULL 478 PAGES OF THE COURSE MATERIAL USED IN THE ERASMUS ACADEMIE COURSE JUNE 8-12, 2009 GO TO: http://ssrn.com/abstract=1263835Michael C. Jensen

This seminar is founded on an ontological model of human nature. Who one is being when being a leader shapes one’s perceptions, emotions, creative imagination, thinking, planning, and action in the exercise of leadership. The intention of this seminar is to leave the participants actually being leaders. In contrast, the attempt to teach leadership...

We present a positive model of integrity that, as we distinguish and define integrity, provides powerful access to increased performance for individuals, groups, organizations, and societies. Our model reveals the causal link between integrity and increased performance, quality of life, and value-creation for all entities, and provides access to th...

This classic by the formulators of agency cost theory discusses five common divisional performance measurement methods—cost centers, revenue centers, profit centers, investment centers, and expense centers—while providing a theory that attempts to explain when each of these methods is likely to be the most efficient. The central insight of the theo...

The discussion in this panel will be on finance and ethics. Participants include: Jonathan Berk (Stanford) Rebecca Henderson (Harvard) Michael Jensen (Harvard)

The Spanish version of this paper is available at: http://ssrn.com/abstract=2134182Note: This paper is an interview of Michael Jensen by Karen Christensen on the topic of integrity. There is confusion between integrity, morality and ethics. In our much longer (and as yet incomplete) paper on the topic (see “Integrity: A Positive Model that Incorpor...

This paper integrates elements from the theory of agency, the theory of property rights and the theory of fi nance to develop a theory of the ownership structure of the fi rm. We defi ne the concept of agency costs, show its relationship to the "separation and control" issue, investigate the nature of the agency costs generated by the existence of...

A quick look at what is happening in the corporate world makes it clear that the stakeholder idea is alive, well, and flourishing; and the question now is not "if" but "how" stakeholdertheory will meet the chal- lenges of its success. Does stakeholder theory's "arrival" mean continued dynamism, refinement, and relevance, or stasis? How will superio...

Mike will submit abstract.

Introduction and SummaryThe Agency Costs of Outside EquitySome Unanswered Questions Regarding the Existence of the Corporate FormThe Agency Costs of DebtA Theory of the Corporate Ownership StructureConclusions

Presented at the Harvard Business School Centennial Conference on Private Equity, New York City, Feb. 13, 2007; the Swedish Institute for Financial Research Conference on The Economics of the Private Equity Market, Stockholm, Sweden, Aug. 30, 2007; American Enterprise Institute Conference on The History, Impact, and Future of Private Equity Ownersh...

This is a slide presentation of the paper Scherr, Allan L. and Jensen, Michael C., "A New Model of Leadership" (08/22/2007). Harvard NOM Working Paper No. 920623 Available at SSRN: http://ssrn.com/abstract=920623.

This is a private URL for distribution of material used in class in the Simon School Leadership Course The Ontological Foundations of Leadership given 9/7 to 9/11/2007.

In this paper we provide a new definition of leadership that gives organizations and individuals access to new power. In our model, leadership consists of four critical elements: -- The creation of a vision for the future that represents a significant departure from the past, one that requires breakthroughs for its realization. -- The creation of a...

Presented at the Center for Public Leadership, John F. Kennedy School of Government, Harvard University, Boston, MA, May 10, 2007.We present a positive model of integrity that provides powerful access to increased performance for individuals, groups, organizations, and societies. Our model reveals the causal link between integrity as we distinguish...

In this paper we provide a new definition of leadership that gives organizations and individuals access to new power, performance and accomplishment. In our model leadership consists of four critical elements: -- The creation of a vision for the future that represents a significant departure from the past, one that requires breakthroughs for its re...

My congratulations and admiration to the Gruter Institute for Law and Behavioral Research and the scholars who have evidenced the courage to tackle a subject as difficult and opaque as the Gruter Institute Project on Values and Free Enterprise. With the support of the John Templeton Foundation, The UCLA-Sloan Research Foundation, and the Ann and Go...

This paper enlarges upon some recent work regarding the appropriate discount rate for public projects and, in particular, shows more fully why risk should enter into the calculation. Indeed, we argue that efficient allocation of risk bearing is usually more difficult for government projects than it is for private ones. Therefore, if anything, the a...

PDF file of slides for Keynote Speech at the RFS-IU Conference on The Causes and Consequences of Recent Financial Market Bubbles, Aug. 12-13, 2005, Bloomington, IN Note: SSRN is experimenting with enabling the distribution of different types of files: slides, spreadsheets, video, etc. This is the third upload of a pdf file of Powerpoint slides. We...

Commencement Address given to the University of Toronto, June 15, 2005. In this talk I enumerate and briefly discuss eleven commitments that form the foundations of an extraordinary life and of leadership. They range from a commitment to a never-ending search for truth, a willingness to delay gratification, to a recognition that since success breed...

Note: SSRN is experimenting with enabling the distribution of different types of files: slides, spreadsheets, video, etc. This is the second upload of a pdf file of Powerpoint slides. We are interested in our users desires to distribute files that go beyond word processing text files. You can communicate with me on these issues via my email address...

In the past few years, we have seen many fine companies end up in ruins and watched record numbers of senior executives go to jail. And we will surely hear of more investigations, more prison terms, and more damaged reputations. Shareholders and society have borne value destruction in the hundreds of billions of dollars. What went wrong? Were manag...

... and how to fix it * by