Session 232

Stakeholders in the Corporate Governance Equation

Track F

Date: Wednesday, October 14, 2009

 

Time: 10:00 – 11:15

Common Ground

Room: Meeting Room 10


Facilitator:
Anja Tuschke, University of Munich

Title: A Behavioral Theory of R&D Investments and Institutions

Authors

  • Ali Shahzad, James Madison University
  • Parthiban David, American University

Abstract: We employ the behavioral theory of the firm (BTF) to explore the role of institutions in shaping managerial aspirations affecting R&D expenditures by the firm. We propose that the predictions of extant theory apply strongly to institutional contexts in developed economies, but require revisions for less developed economies. We test our hypothesis using data on firms in 80 industries drawn from 53 countries with varying levels of institutional protection of stakeholders. We find that there are systematic differences in the search behavior of firms across the globe. BTF predictions of increased R&D expenditures in response to the performance-aspiration gap are strongest in countries whose institutional context is similar to the United States and weaker in institutional contexts that provide greater protection of stakeholders

Title: Change from Without: The Dutch (Non)Response to Pressures for Shareholder Value

Authors

  • Pieter-Jan Bezemer, Queensland University of Technology
  • Frans A.J. Van Den Bosch, Erasmus University-Rotterdam
  • Henk Volberda, Erasmus University Rotterdam

Abstract: Recently, strategy scholars and practitioners have witnessed an increasing attention for the Anglo-American shareholder value model worldwide. The adoption and implementation as well as performance implications of this new model in a stakeholder oriented context have, however, been topic of societal debate. Using a sociopolitical perspective, we examine to which extent the ownership structure of Dutch listed firms has influenced the espousal and implementation of a shareholder value orientation. Using panel data of top-100 listed Dutch firms from 1992 to 2006, we find that while Dutch corporate owners have limited the inclination of companies to implement Anglo-American ideas, corporate “outsiders” (Anglo-American investors and the pro-business Dutch government) have positively influenced the espousal of a shareholder value orientation among firms. We discuss strategy and performance implications.

Title: Factor Analysis on CSR Activities and Financial Performance for European and North American Companies

Authors

  • Toshio Ariu, Central Research Institute of Electric Power Industry

Abstract: It is desirable to clarify a priority and performance for the contents of CSR activities as global standard. We carried out a questionnaire survey on measures for CSR activities, and obtained responses from 271 companies in Europe and North America. Based on factor analysis, we extracted 17 characteristics from CSR activities like corporate governance, employee management, environmental protection and community commitment. Among these characteristics, it was shown that there were significant mutual relationships between acceptance of employee proposals and stakeholder engagement or philanthropic organization, etc. Finally, this paper pointed out that there were some cause and effect relationships between these 17 CSR characteristics and indicators of corporate performance, such as ROA, Tobin's q, growth rate, and profit stability.

Title: Strategic Governance for Sustainable Competitive Advantage

Authors

  • Lisa Papania, Simon Fraser University

Abstract: The development of corporate governance theory is an increasingly important area of strategy research. Much of the extant literature focuses on uncovering the relationship between board composition and firm performance. As a result, general rules about board size and independence for most firms have become accepted. However, it appears that existing hypotheses about governance structures, especially for innovative small publicly-traded firms, are inadequate for predicting governance practices or their impact on firm success. Therefore we propose a theoretical model of corporate governance that positions board composition not as technical specification to be optimized, but as a component of corporate strategy that enables the firm to balance the needs of external stakeholders and internal opportunities to achieve sustainable competitive advantage.

Title: The Controlling Mechanism of Supervisory Boards and Block-Holders in a Two-Tier System

Authors

  • Jana Oehmichen, University of Goettingen
  • Marc Steffen Rapp, Technical University of Munich
  • Michael Wolff, University of Goettingen

Abstract: Times of increasing uncertainty make the risk of incorrect management decisions more important for share- and stakeholders. Therefore the interest in efficient control mechanisms comes back to fore. Control mechanisms can be internal via board members or external via blockholders. We investigate how these mechanisms affect strategic decisions. For some decisions we expect a strong blockholder to substitute the importance of board efficiency. We examine this hypothesis based on a hand-collected panel data-set consisting of some 1,110 firm year observations between 2004 and 2007 from Germany containing more than 5,6oo supervisory board members. We consciously choose Germany as basis since both control measures are clearly separable from other corporate governance ef-fects and therefore easy to measure for the German corporate governance system.

Title: White Knight or Trojan Horse? Sovereign Wealth Fund Investment in US Firms

Authors

  • Karen Schnatterly, University of Missouri
  • Stephen Ferris, University of Missouri
  • Scott Johnson, Oklahoma State University

Abstract: This study examines the investment practices of sovereign wealth funds. Using publicly available data on the stock purchases by SWFs, this study will provide initial empirical evidence regarding two important public policy questions. The first concerns whether sovereign wealth funds invest for profit or if they invest for the pursuit of non-commercial goals such as political influence or control of strategically critical infrastructure. The second question posed in this study is that of investor voice, and if sovereign wealth funds induce meaningful changes in corporate financial, operating or governance strategies following their equity purchases. The findings of this study have important implications regarding the relation between international capital markets, corporate governance and public policy.

All Sessions in Track F...

Sun: 10:00 – 11:30
Session 260: Writing Workshop for Doctoral Students and Junior Faculty
Sun: 13:00 – 14:30
Session 261: Shareholder Primacy and Corporate Policy
Sun: 15:00 – 16:30
Session 262: The Role of Government in M&A Activity
Sun: 16:30 – 17:30
Session 310: Corporate Strategy & Governance, IG Meeting
Mon: 12:45 – 14:00
Session 198: Perspectives on CEO Succession
Session 228: Business Groups, Alliances, and Contracts
Mon: 15:45 – 17:00
Session 229: Alliances and Corporate Strategy
Session 230: Ownership Determinants and Consequences
Mon: 17:15 – 18:30
Session 194: CEOs and Top Management Teams
Session 197: Diversity, Identity, and Corporate Governance
Session 233: Top Executives and Directors in Organizational Dynamics
Tue: 10:00 – 11:15
Session 199: Executive Compensation
Session 200: Social Psychological Perspectives of CEOs
Tue: 11:30 – 12:45
Session 195: Competitive Dynamics of Business Groups
Session 234: Constraints and Catalysts on Corporate Growth
Tue: 14:30 – 15:45
Session 226: Relatedness, Dominant Logics, and Other Diversification Logics
Session 231: Institutions and Agents
Wed: 10:00 – 11:15
Session 227: Corporate Strategy & Diversification
Session 232: Stakeholders in the Corporate Governance Equation
Wed: 11:30 – 12:45
Session 196: Behavioral Perspectives on Boards of Directors
Session 225: Acquisitions and Corporate Strategy


Strategic Management Society

Washington DC