Institutional owners, despite their size, are usually unable to discipline ineffective top managers and cannot influence a firm's choice of strategies and overall strategic direction.

Question

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Institutional owners, especially those with large ownership stakes, do have the power to discipline ineffective top managers and influence a firm's choice of strategies and overall strategic direction. They can do so through various mechanisms such as proxy voting, board representation, and active engagement with management.

Institutional Owners, Despite Their Size, Are Usually Unable to Discipline