Or, in the phrasing of Weisbach (1988): "Managerial entrenchment occurs when managers gain so much power that they are able to use the firm to further their own interests rather than the interests of shareholders."
The abstract to Shleifer and Vishny, 1989, p 123, is nicely explicit: "By making manager-specific investments, managers can reduce the probability of being replaced, extract higher wages and larger perquisities from shareholders, and obtain more latitude in determining corporate strategy."
Terms related to Entrenchment:
- Managers in the American Workforce
- How Corporations Raise Capital
- Lessons Learned From The Savings and Loan Crisis
Journal Articles on Entrenchment: