Strategic audit and ownership strategy http://www.thejournalofbusiness.org/index.php/site 93 Strategic Audit and Ownership Strategy Mike Franz Wahl 1 ABSTRACT In the new global economy, ownership has become a central issue for organizational performance. Ownership strategy is where corporate governance meets strategic management. Highlighting a knowledge gap in the field of corporate governance, the author is asking the central research question: Dzhow to develop an ownership strategy?dz The main purpose of this paper is to answer this original question and develop a better understanding about ownership strategies. Theoretically there is evidence to indicate that there is a link between strategic audit and ownership strategy. Analyzing firm cases from Estonia allows concluding that the strategic audit is useful for developing systemically ownership strategies, which in turn could be a realistic alternative for complete contracts. The use of strategic audits gives the business owner an opportunity to analyze his own actions and behavior, learning, managing knowledge, and finally clearly expressing his will in the form of an ownership strategy. Keywords: Corporate governance, ownership strategy, strategic audit, text analytics. JEL Codes: C38, D86, G34, L20. Available Online: October 2, 2015. This is an open access article under Creative Commons Attribution 4.0 License, 2015. 1.0 INTRODUCTION Agency theory (Alchian & Demsetz, 1972; Eisenhardt, 1989; Jensen & Meckling, 1976) is still the most popular theoretical approach in corporate governance, being concerned with relationships between owners and directors. While the agent (director, manager) has been asked by the principal (owner) to carry out a specific duty, the agent may not act in the best interest of the principal once the complete contract has been signed ( Jensen & Meckling, 1976). In practice it is impossible to write such complex contracts, and they would be probably impossible to monitor. Ownership strategies could substitute complete contracts. Highlighting a knowledge gap in the field of corporate governance, investigating that although some research has been carried out on importance of ownership in strategic management (Wheelen & Hunger, 2012), understanding corporate owners classes and types (Wahl, 2006, 2011, 2012), also conceptualizing ownership strategies (Collin, 2000; Luoma, 2011; Wahl, 2012), and strategy development (Grant, 1991) no studies have been found which 1 Tallinn University of Technology, Estonia. E-mail: mike.wahl@ttu.ee International Journal of Business and Social Research Volume 05, Issue 09, 2015