William H. Meckling

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William "Bill" Henry Meckling II (September 20, 1921 – May 15, 1998) was an American finance professor. Along with Michael Jensen, he pioneered the field of corporate finance with the 1976 publication of "Theory of The Firm".^[1]

Meckling was the second dean of the University of Rochester's William E. Simon Graduate School of Business Administration, serving from 1964 to 1983. During his tenure as dean, he oversaw the development of the management school and recruited several noteworthy economist including Michael Jensen and Kenneth French.^{[citation needed]}

Early life and education

Meckling was born in McKeesport, Pennsylvania, a suburb of Pittsburgh, to William Henry Meckling Sr. and Katherine Elizabeth Meckling. The second of six children, he spent time in various cities across Pennsylvania and Indiana before attending Westminster College (Pennsylvania) in 1938.^[2] While there, he studied business and was a member of Kappa Phi Lambda. After graduation, Meckling joined the Army Air Corp as a private and concluded the war in 1945 as a sergeant.^{[citation needed]}

Following the war, he married Rebecca Frances Ely. The couple moved to Denver to be with Rebecca's mother where Meckling enrolled at the

Meckling joined RAND at the same time as Armen Alchian where the two developed an immediate friendship. At RAND, Meckling frequently collaborated with Alchian, Ronald Coase, Burton Klein, and Andrew Marshall (foreign policy strategist). His primary focus was on incentives, economic policy related to military research and development and public policy concerns related to communications satellites.^[3]

It was during his time at RAND that Meckling would also join the

Career

University of Rochester

In 1962, a fellow Mont Perlin Society member and University of Chicago alumni,

Meckling was responsible for establishing the school's Center for Research in Government Policy and Business (now known as the Bradley Policy Center), which provides a public forum to research and examine the interaction of public policy and business strategy.^[citation needed]

He retired from the University in 1983.^[6]

Research in corporate structure and incentives

Theory of the Firm (1976)

In 1973,

Jensen and Meckling would spend the next year refining the paper as they found holes in the view of a firm as a profit-maximizing entity. This realization and the justification for their reasoning, led to the paper being well over 100 pages by the time it was completed. The pair presented this paper to their colleagues at Rochester before taking it abroad where it was received poorly. As Jensen recalls in a 2013 interview, "[the faculty] hated it... It was not a mild reaction. They accused us of being wrong."[8]

The key ideas in the paper built upon Meckling's observations while working at RAND. Chief among them were the importance of organizational structure and aligning incentives to desired outcomes.^{[citation needed]}

Outside academia

Meckling served a six-year term on the

In addition to this, he worked as the executive director of President Nixon's "Commission on an All-Volunteer Armed Force",[9] using his connections at the CNA to secure some of the data used in the final report.

Personal life and legacy

Meckling and his wife, Rebecca Frances Ely, had five children. Following his retirement, he moved to California, where he lived until his death in 1998 as a result of heart disease.

References