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Governance strategy: a property right approach turning governance into action

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Abstract

Corporate governance (CG) needs to acknowledge the intentional part of governance, where an actor of governance uses the set of corporate governance mechanisms in order to influence the agent to create a performance that will satisfy the interest of the principal. This paper offers a conception of this activity through the concept of governance strategy. The concept is based on a property right approach and derived within the context of agency theory, stressing the interest and the capacity of the principal. It is applied to two empirical organisations seldom investigated in CG research: the organisation of multinational corporations in a business group and the organisation of a riding school in a democratic not-for-profit association, thereby extending the relevance of the concept from corporate governance to organizational governance. The empirical analysis indicates the relevance of the conception and suggests further extension through hypotheses of governance strategy related to environmental influence, accessibility of governance mechanisms and momentum of mechanisms.

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Authors and Affiliations

  1. Department of Business Studies, Kristianstad University, Kristianstad, 291 88, Sweden

    Sven-Olof Collin

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  1. Sven-Olof Collin
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Correspondence to Sven-Olof Collin.

Additional information

The project is financed by The Bank of Sweden Tercentenary Foundation. An earlier version was presented at the Academy of Management Conference, Atlanta. Georgia, August 11–16, 2006. The paper has benefited from comments by Elin Smith, Kristianstad University and two anonymous reviewers. David Harrison at Proper English AB contributed with language editing.

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Collin, SO. Governance strategy: a property right approach turning governance into action. J Manage Governance 11, 215–237 (2007). https://doi.org/10.1007/s10997-007-9027-4

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  • DOI: https://doi.org/10.1007/s10997-007-9027-4

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