[...] The paper starts with a brief description of the theoretical bases by defining the term Corporate Governance. Further, Corporate Governance’s historical origin is examined and the theoretical assumptions of the two contrasting approaches are described. A short insight is given to the Corporate Governance system in Germany to show that there are differences in national governance systems, especially between the Anglo-Saxon and the German one. For theoretical clarity, the terms innovativeness and entrepreneurship will be defined after. In chapter three, the main part of the paper, empirical findings between the relationship of Corporate Governance mechanisms and innovativeness are examined and the design of control and incentive systems is also discussed. A psychological model, which shows the effects of overemphasizing control or collaboration tensions to Corporate Governance, is then introduced. In the following chapter, the mediating role of culture to Corporate Governance is shown. Additionally, a model of a cultural type is presented, thus making the classification of an organization into four different culture types possible. Finally, my own contingency theoretical framework is constructed, which makes the application of the right theoretical approach to Corporate Governance dependent on the type of culture. The main findings of the paper are that Corporate Governance systems are correlated with innovativeness and that the stewardship approach to Corporate Governance is superior to the agency one in revealing innovativeness.
Inhaltsverzeichnis (Table of Contents)
- INTRODUCTION OF THE TOPIC
- CONCEPTUAL AND THEORETICAL BASES
- CORPORATE GOVERNANCE
- Berle and Means Corporations
- Contrasting Approaches to CG: Agency Theory vs. Stewardship Theory
- Corporate Governance Systems
- Corporate Governance in Germany
- INNOVATIVENESS
- ENTREPRENEURSHIP
- CORPORATE GOVERNANCE
- THE RELATIONSHIP BETWEEN CORPORATE GOVERNANCE AND INNOVATIVENESS
- SOME EMPIRICAL FINDINGS
- Ownership Structure
- Board Composition - Inside versus Outside Directors
- CEO Duality
- CONTROL AND INCENTIVE SYSTEMS
- Designing Control Systems
- Designing Incentive Systems
- The Model of Reinforcing Cycles
- SOME EMPIRICAL FINDINGS
- CULTURAL LIMITATIONS OF CORPORATE GOVERNANCE APPROACHES
- CULTURE AS A SYSTEM OF SOCIAL CONTROL
- CULTURAL TYPES
- THEORETICAL FRAMEWORK
- DISCUSSION
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to challenge the prevailing agency approach to corporate governance by introducing the stewardship theory as an alternative. It analyzes the impact of these contrasting theories on a firm's innovativeness, a critical factor for competitiveness in today's demanding market. This paper explores the relationship between corporate governance and innovativeness, considering the role of entrepreneurship and the influence of cultural factors.
- The relationship between corporate governance and innovativeness
- The influence of agency theory and stewardship theory on a firm's capacity for innovation
- The significance of entrepreneurship in driving innovation
- The impact of culture on corporate governance practices
- The development of a theoretical framework that considers cultural aspects in the context of agency and stewardship theories
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction of the Topic: This chapter introduces the concept of corporate governance and its theoretical underpinnings. It highlights the limitations of the agency theory in understanding the relationship between corporate governance and innovativeness.
- Conceptual and Theoretical Bases: This section explores the historical development of corporate governance, contrasts the agency theory and stewardship theory, and provides an overview of corporate governance systems, including the German system. It defines the terms innovativeness and entrepreneurship.
- The Relationship Between Corporate Governance and Innovativeness: This section examines the impact of various corporate governance mechanisms, such as ownership structure, board composition, and CEO duality, on a firm's innovativeness. It also analyzes the role of control and incentive systems in shaping a firm's innovative capacity.
- Cultural Limitations of Corporate Governance Approaches: This chapter investigates the role of culture in shaping corporate governance practices. It examines how cultural differences can influence the effectiveness of agency and stewardship theory.
- Theoretical Framework: This chapter presents a modified framework that integrates cultural considerations into the agency/stewardship theory debate. It proposes a new approach to understanding the complex interplay between corporate governance, innovativeness, and culture.
Schlüsselwörter (Keywords)
This paper delves into the core concepts of corporate governance, agency theory, stewardship theory, innovativeness, entrepreneurship, and culture. It explores the impact of these factors on firm performance and investigates the role of various corporate governance mechanisms, such as ownership structure, board composition, and control systems. The paper analyzes how cultural influences shape the effectiveness of different theoretical approaches to corporate governance.
- Quote paper
- Mahir Sahin (Author), 2005, The Impact of Corporate Governance on Innovativeness, Munich, GRIN Verlag, https://www.grin.com/document/39545
