Showing papers on "Corporate governance published in 1991"
TL;DR: For the better part of 30 years now, corporate executives have struggled with the issue of the firm's responsibility to its society, and it became quickly apparent to everyone, however, that this pursuit of financial gain had to take place within the laws of the land.
7,143 citations
TL;DR: In this article, the authors define corporate social performance (CSP) and reformulate the CSP model to build a coherent, integrative framework for business and society research, where principles of social responsibility are framed at the institutional, organizational, and individual levels; processes of social responsiveness are shown to be environmental assessment, stakeholder management, and issues management; and outcomes of CSP are posed as social impacts, programs, and policies.
Abstract: This article defines corporate social performance (CSP) and reformulates the CSP model to build a coherent, integrative framework for business and society research. Principles of social responsibility are framed at the institutional, organizational, and individual levels; processes of social responsiveness are shown to be environmental assessment, stakeholder management, and issues management; and outcomes of CSP are posed as social impacts, programs, and policies. Rethinking CSP in this manner points to vital research questions that have not yet been addressed.
4,690 citations
TL;DR: In this article, an empirical test fails to support agency theory and provides some support for stewardship theory, which argues that shareholders interests require protection by separation of incumbency of roles of board chair and CEO.
Abstract: Agency theory argues that shareholder interests require protection by separation of incumbency of roles of board chair and CEO. Stewardship theory argues shareholder interests are maximised by shared incumbency of these roles. Results of an empirical test fail to support agency theory and provide some support for stewardship theory.
2,957 citations
TL;DR: In this paper, the authors proposed a model that identifies potential environmental, strategic, and organizational factors that may spur or stifle corporate entrepreneurship, and highlighted the potential associations between corporate entrepreneurship and corporate financial performance.
1,625 citations
TL;DR: In the long run, however, the best strategy is to organize arid operate efficiently as discussed by the authors, which is not to say that strategizing efforts to deter or defeat rivals with clever ploys and positioning are unimportant.
Abstract: best strategy. That is not to say that strategizing efforts to deter or defeat rivals with clever ploys and positioning are unimportant. In the long run, however, the best strategy is to organize arid operate efficiently. Business strategy is a complex subject. It not only spans the functional areas in businessmarketing, finance, manufacturing, international business, etc.-but it is genuinely interdisciplinary-involving. as it does, economics, politics, organization theory, and aspects of the law. Business strategy has become increasingly important with the growth of the multinational enterprise and of international trade and competition. Although several different approaches to the substantive aspects of business strategy can be distinguished, the main contestants cluster under two general headings: strategizing and economizing. The first of these appeals to a power perspective; the second is principally concerned with efficiency. Both of these orientations are pertinent to the study .of business strategy, but power approaches have played a role in the recent business strategy literature that belies its relative importance. Partly that may be because the analysis of efficiency is believed to have reached such an advanced state of development that further work of this kind is not needed. Economizing is important, but we know all about that. What we don’t understand, and need to study, goes the argument, is strategizing. Not only is strategizing where many of the novel practices and new issues are said to reside, but the pressing realities of foreign competition are first and foremost of a strategizing kind. I take exception with arguments of both kinds. Thus, although it is true that efficiency analysis of the firm-as-production function genre has reached a high state of refinement, that does not exhaust all that is relevant to the assessment of efficiency. Efficiency analysis properly encompasses governance costs as well as production costs, and the analysis of comparative economic organization (governance) is still in
1,364 citations
TL;DR: This article examined the differential financial implications of these choices for 141 corporations over a 6-year time period and found that firms opting for independent leadership consistently outperformed those relying upon CEO duality.
Abstract: All public corporations must make a choice regarding board leadership structure. Advocates of more effective corporate governance argue for independent board leadership; yet many firms choose instead to allow the CEO to serve as board chairperson (CEO duality). This study examines the differential financial implications of these choices for 141 corporations over a 6-year time period. Results indicate significant differences in performance between the two groups along a number of performance measures; more specifically, firms opting for independent leadership consistently outperformed those relying upon CEO duality.
1,103 citations
01 Jan 1991
TL;DR: Results indicate significant differences in performance between the two groups along a number of performance measures; more specifically, firms opting for independent leadership consistently outperformed those relying upon CEO duality.
Abstract: All public corporations must make a choice regarding board leadership structure. Advocates of more effective corporate governance argue for independent board leadership; yet many firms choose instead to allow the CEO to serve as board chairperson (CEO duality). This study examines the differential financial implications of these choices for 141 corporations over a 6-year time period. Results indicate significant differences in performance between the two groups along a number of performance measures; more specifically, firms opting for independent leadership consistently outperformed those relying upon CEO duality.
1,050 citations
TL;DR: This paper examined the extent to which the percentage of outside directors on a corporation's board of directors, the concentration of equity ownership, and the roles of individual and institution directors were influenced by outside directors.
Abstract: This study examined the extent to which the percentage of outside directors on a corporation’s board of directors, the concentration of equity ownership, and the roles of individual and institution...
972 citations
Book•
01 Jan 1991
TL;DR: In this article, the authors assess the future and further education quality in higher education quality and qualities, overview access, quality and governance, and one institution's struggle for progress appendix.
Abstract: Reassessing the future finished and unfinished business widening the access argument access and institutional change access - an overview governance and sectoral differentiation governance - the institutional viewpoint governance - an overview the future and further education quality in higher education quality and qualities - an overview access, quality and governance - one institution's struggle for progress appendix.
718 citations
TL;DR: In this article, the authors analyzed and compared the various governance structures through which new biotechnologies have been developed and commercialized over the past decade and a half, including forward vertical integration by new biotechnology firms (NBFs) from RD, backward integration by established firms from downstream industries into biotechnology RD and various forms of collaboration between NBFs and established firms involving R&D, technology transfer, production, and distribution.
503 citations
TL;DR: In this article, the authors argue that the efficacy of shareholder litigation as a governance mechanism is hampered by collective action problems because the cost of bringing a lawsuit, while less than the shareholders' aggregate gain, is typically greater than a shareholder-plaintiff's pro rata benefit.
Abstract: Shareholder litigation is accorded an important stopgap role in corporate law. Liability rules are thought to be called into play when the primary governance mechanisms-board of directors (Williamson), executive compensation (e.g., Smith and Watts), and outside block ownership (Shleifer and Vishny)- fail in their monitoring efforts but the misconduct is not of sufficient magnitude to make a control change worthwhile. By imposing personal liability on corporate officers and directors for breach of the duties of care (negligence) and loyalty (conflict of interest), litigation is thought to align managers' incentives with shareholders' interests. The efficacy of shareholder litigation as a governance mechanism is hampered by collective action problems because the cost of bringing a lawsuit, while less than the shareholders' aggregate gain, is typically greater than a shareholder-plaintiff's pro rata benefit. To mitigate this difficulty, successful plaintiffs are awarded counsel fees, providing a financial incentive to the plaintiff's attorney to police management. There is, however, a principalagent problem with such an arrangement: the attorney's incentives need not coincide with the shareholders' interest. For instance, settlement recoveries in
TL;DR: The results of this research suggest that changes in ownership and board have significant independent and interactive effects on strategic change.
Abstract: Organizational theorists have traditionally focused attention on the relationship between chief executive officer (CEO) succession and strategic change. This study extends that perspective and explores the effects of changes in an organization's management, ownership, and board of directors on the process of strategic change. The results of this research suggest that changes in ownership and board have significant independent and interactive effects on strategic change.
01 Apr 1991
Book•
01 Sep 1991
TL;DR: In this article, Jacobs takes a hard look at why so few American businesses are managed for the long term and why so many shareholders and lenders have abandoned the virtue of patient capital.
Abstract: In this book Michael Jacobs takes a hard look at why so few American businesses are managed for the long term and why so many shareholders and lenders have abandoned the virtue of patient capital. He describes practices and regulations that pit owners and managers of America's corporations against each other, often at the expense of their mutual long-term prosperity. Jacobs offers provocative proposals to reform investment practices, corporate governance mechanisms, executive compensation plans, and banking regulations that have brought about the short-termism eroding US competitiveness and creating distant, if not adversarial relationships between capital providers and corporations.
TL;DR: Lindberg and Campbell as mentioned in this paper studied the evolution of economic governance in the United States from 1830-1986 and found that the state and the organization of economic activity in the US changed with economic growth.
Abstract: List of contributors List of figures List of tables Preface Part I. Conceptual and Historical Foundations: 1. Economic governance and the analysis of structural change in the American economy Leon N. Lindberg, John L. Campbell and J. Rogers Hollingsworth 2. The logic of coordinating American manufacturing sectors J. Rogers Hollingsworth Part II. Empirical Studies of Governance of the American Transformations in the United States: 3. Transformations in the governance of the American telecommunications industry Kenneth N. Bickers 4. Contradictions of governance in the nuclear energy sector John L. Campbell 5. The statist evolution of rail governance in the United States, 1830-1986 Robert Dawson Kennedy Jr 6. Governance of the steel industry: what caused the disintegration of the oligopoly? Christoph Scherrer 7. Governance of the automobile industry: the transformation of labour and and supplier relations Christoph Scherrer 8. The dairy industry: form yeomanry to the institutionalization of multilateral governance Brigitte Young 9. Economic governance and the American meatpacking industry John Portz 10. The invisible hand in healthcare: the rise of financial markets in the US hospital industry Patricia J. Arnold Part III. Theoretical Evaluation of the Empirical Cases: 11. The evolution of governance regimes John L. Campbell and Leon N. Lindberg 12. The state and the organization of economic activity Leon N. Lindberg and John L. Campbell References Index.
TL;DR: Spontaneous governance has been the prevailing economic approach to economic organization since Adam Smith made perceptive reference to, and briefly described, the "invisible hand," according to which each businessman "by pursuing his own interest... frequently promotes that of society more effectively than when he really intends to promote it" (Smith:423) as discussed by the authors.
Abstract: Spontaneous governance has been the prevailing economic approach to economic organization since Adam Smith made perceptive reference to, and briefly described, the "invisible hand," according to which each businessman "by pursuing his own interest . . . frequently promotes that of society more effectively than when he really intends to promote it" (Smith:423). That formulation is properly regarded as a watershed event and has had a massive and continuing influence on economics. One of the most praiseworthy intellectual activities with which an economist can become engaged is to identify and explicate spontaneous control mechanisms through which hands-off governance operates. Not only does it take a powerful mind-or, usually, the combined efforts of many powerful minds-to discover and model the mechanisms of spontaneous governance, but the benefits are stupendous. The need to become knowledgeable about, much less engrossed in the study of, institutional details is relieved if not vitiated if spontaneous mechanisms are the main arena. That we appear to be subject to intentional governance structures everywhere we turn is thus misleading: the real action is largely invisible.'
TL;DR: The authors reviewed recent developments in the analysis of business power and the corporate elite, focussing on those approaches rooted in the techniques of social network analysis, and argued that results from these studies cannot be generalized across all societies.
Abstract: This paper reviews recent developments in the analysis of business power and the corporate elite, focussing on those approaches rooted in the techniques of social network analysis. A typology of research strategies is outlined, and this is illustrated through discussions of North American studies. It is argued that results from these studies cannot be generalized across all societies. This is illustrated with reference to European and Asian studies, where a number of variant patterns of corporate development can be discerned. Particular attention is given to Japan and the development of its pattern of corporate organization, which contrasts sharply with the dominant Anglo-American pattern.
TL;DR: In this article, the authors found a positive relationship between the amount of institutional ownership of corporate stock and a company's social responsiveness as measured by the representation of women on its board of directors; however, no statistically significant relationship with social responsibility was found.
Abstract: Collectively, institutions own an increasing proportion of outstanding corporate equities. As an emergent force in shaping corporate America, the linkages between institutional ownership and corporate social performance (CSP) require empirical examination. Not only do corporate policy makers need to know those areas where social performance may lure or inhibit capital infusions, lawmakers also need a better understanding of the social forces guiding corporate policy. As anticipated, this study found a positive relationship between the amount of institutional ownership of corporate stock and a company's social responsiveness as measured by the representation of women on its board of directors; however, no statistically significant relationship with social responsibility as measured by charitable giving was found. The exemplar of social issues management — compliance with the Sullivan principles — showed an unexpected, negative relationship with the level of institutional ownership.
Posted Content•
TL;DR: In the classic story, the large public firm survived because it best balanced the problems of managerial control, risk sharing, and capital needs as mentioned in this paper. But the problem of risk sharing was not addressed.
Abstract: Why is the public corporation-with its fragmented shareholders buying and selling on the stock exchange-the dominant form of enterprise in the United States? Since Berle and Means, the conventional corporate law story begins with technology dictating large enterprises with capital needs so great that even a few wealthy individuals cannot provide enough. These enterprises consequently must draw capital from many dispersed shareholders. Shareholders diversify their own holdings, further fragmenting ownership. This combination of a huge enterprise, concentrated management, and dispersed, diversified stockholders shifts corporate control from shareholders to managers. Managers can pursue their own agenda, at times to the detriment of the enterprise.In the classic story, the large public firm survived because it best balanced the problems of managerial control, risk sharing, and capital needs. In a Darwinian evolution, the large public firm mitigated the managerial agency problems with a board of directors of outsiders, with a managerial headquarters of strategic planners overseeing the operating divisions, and with managerial incentive compensation. Hostile takeovers, proxy contests, and the threat of each further disciplined managers. Fragmented ownership survived because public firms adapted. They solved enough of the governance problems created by the large unwieldy structures needed to meet the huge capital needs of modern technology. In the conventional story, the large public firm evolved as the efficient response to the economics of organization.
Book•
01 Sep 1991
TL;DR: In this article, the authors present the preliminary results of the work done, based on an analysis of accounting data from large corporations in nine countries - India, South Korea, Pakistan, Thailand, Mexico, Malaysia, Turkey and Zimbabwe Central among the conclusions of this report is the finding that corporate capital structures in developing countries differ in important ways from those in developed countries.
Abstract: Questions of corporate capital structures have long attracted the interest of researchers in developed countries, and their are clear links between these issues and debates over the kinds of financial markets and institutions that are supportive of long-term growth Yet there has been very little empirical work on the capital structures of corporations in developing countries This study presents the preliminary results of the work done, based on an analysis of accounting data from large corporations in nine countries - India, South Korea, Pakistan, Thailand, Mexico, Malaysia, Turkey and Zimbabwe Central among the conclusions of this report is the finding that corporate capital structures in developing countries differ in important ways from those in developed countries These differences are particularly marked with respect to the use of external finance and the use of equity finance; both of which are much higher in developing than in developed countries
TL;DR: Research output in strategic management has enjoyed enormous growth over the last two decades, and as a frequent field observer of large firms, I am often struck by the sense that most of this research is irrelevant to what is going on in such firms today as mentioned in this paper.
Abstract: Research output in strategic management has enjoyed enormous growth over the last two decades. As a scholar in strategic management, I find growth of the field to be gratifying. However, as a frequent field observer of large firms, I am often struck by the sense that most of this research is irrelevant to what is going on in such firms today. This is most troubling when I reflect on the seeming modest impact research in strategic management has had on either practice or government policy. By contrast, financial economists have significantly influenced the national debate on U.S. firms and international competitiveness in the 1980's, and much of their research has found ready application on Wall Street. This is likely due to their willingness to both address issues of relevance today and make forceful prescriptive recommendations. In this regard topics such as LBO's, hostile takeovers, junk bonds, executive compensation, corporate governance, acquisitions, divestitures, and government intervention in security markets come to mind. I believe that scholars in strategic management could have had much of great value to say about many of these topics in the 1980's, especially international competitiveness. Furthermore, these largely unheard voices disagreed substantially with the recommendations of financial economists. Why has the proliferation of research in strategic management not been accompanied by increasing impact? Like the editors of this journal (Daft and Lewin 1990) have observed about organization studies generally, I feel that much research in strategic management seems increasingly and prematurely stuck in a "normal science straightjacket." As Daft and Dr. Buenger (1990) put it, "strategic management has been ensnared by the rituals and paraphernalia of normal science" (p. 82). The purpose of this essay is to discuss some specific aspects of this evolving "straightjacket" for strategic management and make some pragmatic proposals for breaking free. It is intended as editorial comment (i.e., opinion) not scholarly analysis. Certainly some, and perhaps many, in the field will disagree with what I say. At the same time, I know that many will agree. Hopefully, the essay will help stimulate further reflective thinking in the field. If it does this it will have achieved its goal. I accept the assertion that research in strategic management should have relevance to understanding actual managers, actual strategic decisions, actual businesses units, actual firms, and actual industries as they exist today or are likely to exist in the future. I further believe that the results of this research should ultimately find important application in both industry and government. There are several aspects of research in strategic management that seem to contribute to what Daft and Lewin call a "sense of irrelevance" and "incremental, footnote-on-footnote research." Much current research is based on concepts developed decades ago on the basis of studies of firms as they and their environments were
TL;DR: The authors argue that managers use corporate contributions to influence various stakeholders including stockholders, consumers, employees, investors, publics and societal institutions, and the societal implications of managers' discretionary uses of corporate contributions are also discussed.
Abstract: Researchers have argued that corporate contributions serve as necessitated investments, social currency, or social responsibility efforts. This article integrates and extends these perspectives to develop a view of corporate contributions as managerial masques. It argues that managers use corporate contributions to influence various stakeholders including stockholders, consumers, employees, investors, publics and societal institutions. A strategic framework is used to explore how managers promote managerial and corporate interests through corporate contributions. the societal implications of managers' discretionary uses of corporate contributions are also discussed.
TL;DR: In this paper, the authors argue that the public corporation is as much a political adaptation as an economic or technological necessity, and there are organizational alternatives to the fragmented ownership of the large public corporation; the most prominent alternative is concen-
Abstract: Why is the public corporation-with its fragmented shareholders buying and selling on the stock exchange-the dominant form of enterprise in the United States? Since Berle and Means, the conventional corporate law story begins with technology dictating large enterprises with capital needs so great that even a few wealthy individuals cannot provide enough. These enterprises consequently must draw capital from many dispersed shareholders. Shareholders diversify their own holdings, further fragmenting ownership. This combination of a huge enterprise, concentrated management, and dispersed, diversified stockholders shifts corporate control from shareholders to managers. Managers can pursue their own agenda, at times to the detriment of the enterprise.' In the classic story, the large public firm survived because it best balanced the problems of managerial control, risk sharing, and capital needs. In a Darwinian evolution, the large public firm mitigated the managerial agency problems with a board of directors of outsiders, with a managerial headquarters of strategic planners overseeing the operating divisions, and with managerial incentive compensation. Hostile takeovers, proxy contests, and the threat of each further disciplined managers. Fragmented ownership survived because public firms adapted. They solved enough of the governance problems created by the large unwieldy structures needed to meet the huge capital needs of modern technology. In the conventional story, the large public firm evolved as the efficient response to the economics of organization. I argue here that the public corporation is as much a political adaptation as an economic or technological necessity. The size and technology story fails to completely explain the corporate patterns we observe. There are organizational alternatives to the fragmented ownership of the large public corporation; the most prominent alternative is concen-
TL;DR: In this article, a synthetic explanatory framework that combines sectoral analysis and national domestic structuralism in order to account for industrial innovation strategies in advanced capitalist countries is developed, and the fruitfulness of this approach is illustrated by developing a new account of Japan's success and failure in industrial innovation, which overcomes the contradictions among the main alternatives offered in the past.
Abstract: In comparative research on industrial policy strategies, attention has shifted from national-level variables to sectoral variables in both the description and the explanation of policy. The sectoral literature, however, lacks analytic focus and has provided little systematic insight into the causes of cross-sectoral variance in governance structures and policy strategies. Based on recent contributions to the economics and sociology of formal organizations, this article attempts to sharpen the concept of “industrial sector” and to provide a rationale for why sectoral structures and strategies vary. Next, it develops a synthetic explanatory framework that combines sectoral analysis and national domestic structuralism in order to account for industrial innovation strategies in advanced capitalist countries. In the final section, the fruitfulness of this approach is illustrated by developing a new account of Japan's success and failure in industrial innovation, an account that overcomes the contradictions among the main alternatives offered in the past. The key objective of the article, however, is to develop a new set of theoretical hypotheses for cross-national research, not a rigorous empirical test of its main propositions.
TL;DR: In this paper, a discussion of the role of stakeholders in the management of a corporation is presented. But the focus is not on maximizing profits for stockholders, but on protecting the rights and interests of the other stakeholders.
01 Jan 1991
TL;DR: The work and investments by Afghans and international partners as discussed by the authors have made significant progress towards rebuilding its political system and institutions and political participation, especially among women, is growing, and women's political participation is growing.
Abstract: Afghanistan has made significant progress towards rebuilding its political system and institutions. Political participation – especially among women – is growing. These accomplishments are the result of work and investments by Afghans and international partners. Since 2001, Afghanistan has adopted a new constitution; organized presidential, parliamentary, and provincial council elections; established Ministries to deliver services to the Afghan people; and, developed a vibrant media and committed civil society.
TL;DR: In this paper, the authors report on the views of the ethical unit trusts concerning sources of information used for ethical investment decisions and conclude with a discussion of the implications for corporate reporting of a more radical perspective on social and environmental matters.
Book•
24 Jun 1991
TL;DR: The Corporate Responsibility Debate as discussed by the authors The Corporate Responsibility debate The Corporate and Responsibility Debate The Corporation and Responsibility The Types of Corporate Responsibility The Relations of Accountability Models of the Corporation--I models of the corporation--II Theories of Institutional Legitimacy The four theories of corporate responsibility The classical theory of corporate Responsibility The Response to the Classical Theory The Stakeholder Theory The Social Demandingness Theory The social Activist Theory The Question of Plant Relocation or Closing or Closing--I The question of plant relocation or closing--II Collective and Subordinate Responsibility Individual and Collective Responsibility
Abstract: Preface The Assumptions of Corporate Responsibility The Corporate Responsibility Debate The Corporation and Responsibility The Types of Corporate Responsibility The Relations of Accountability Models of the Corporation--I Models of the Corporation--II Theories of Institutional Legitimacy The Four Theories of Corporate Responsibility The Classical Theory of Corporate Responsibility The Response to the Classical Theory The Stakeholder Theory The Social Demandingness Theory The Social Activist Theory The Question of Plant Relocation or Closing--I The Question of Plant Relocation or Closing--II Collective and Subordinate Responsibility Individual and Collective Responsibility The Responsibility of Subordinates The Corporate Responsibility Debate Bibliographic Essay Indexes