Advertisement

Philosophical Underpinnings to Corporate Governance: A Collibrational Approach

  • Steve Letza
  • Clive Smallman
  • Xiuping Sun
  • James Kirkbride
Chapter
Part of the Studies in Economic Ethics and Philosophy book series (SEEP, volume 39)

Abstract

The current debate on corporate governance can be characterised as a search for the perfect model. The academic discourse is polarised either on the shareholder paradigm, where the primary focus is on maximisation of shareholder wealth, or on the stakeholder paradigm, where a broader set of issues are presented as pertinent to best practice corporate governance. In the practitioner discourse, the debate is fundamentally focused on practical mechanisms to discipline directors and other actors where the emphasis is on developing regulation either in the form of law or codes. We argue that both discourses rely on a homeostatic view of the corporation and its governance structures. Further, we argue that both discourses pay inadequate attention to the underlying philosophical presuppositions resulting in a static approach to the understanding of corporate governance. We present an alternative, a processual approach, as a means of avoiding the traditional trap in corporate governance theorising. Using this approach, we argue that a collibrated mechanism is more likely to emerge and consequently a better understanding of the heterogeneity of corporate governance practice will follow, providing deeper insight into the fluxing nature of corporate bodies and their governance structures.

Keywords

Corporate Governance Governance Structure Stakeholder Theory Stakeholder Management Stakeholder Perspective 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Notes

Acknowledgements

The author is grateful for comments made by reviewers and those in attendance at the conferences.

References

  1. Alchian, A.A., and H. Demsetz. 1972. Production, information costs, and economic organization. American Economic Review 62: 777–795.Google Scholar
  2. Ancona, D.G., G.A. Okhuysen, and L.A. Perlow. 2001. Taking time to integrate temporal research. Academy of Management Review 26: 512–529.Google Scholar
  3. Arthur, E.E. 1987. The ethics of corporate governance. Journal of Business Ethics 6: 59–70.CrossRefGoogle Scholar
  4. Barker, E. 1950. Introduction. In Natural law and the theory of society 1500 to 1800, ed. O.F. von Gierke, ix–xci. Cambridge: Cambridge University Press.Google Scholar
  5. Berger, P.L., and T. Luckmann. 1966. The social construction of reality: A treatise in the sociology of knowledge. Garden City, NY: Doubleday.Google Scholar
  6. Bergson, H. 1903. An introduction to metaphysics. London: Macmillan.Google Scholar
  7. Berle, A.A., and G.C. Means. 1932. The modern corporation and private property. New York, NY: Macmillan.Google Scholar
  8. Bhojraj, S., and P. Sengupta. 2003. Effect of corporate governance on bond ratings and yields: The role of institutional investors and outside directors. Journal of Business 76: 455–475.CrossRefGoogle Scholar
  9. Bishop, M. 1994. Watching the boss. The Economist, 29 January 1994: 3–5.Google Scholar
  10. Blair, M.M. 1995. Ownership and control: Rethinking corporate governance for the twenty-first century. Washington, DC: Brookings Institution.Google Scholar
  11. Boden, D. 1990. The world as it happens: Ethnomethodology and conversation analysis. In Frontiers of social theory: A new synthesis, ed. G. Ritzer, 185–213. New York: Columbia University Press.Google Scholar
  12. Bourdieu, P. 1984. Distinction: A social critique of the judgement of taste. London: Routledge.Google Scholar
  13. Burchell, G., C. Gordon, and P. Miller. 1991. Preface. In The Foucault effect: Studies in governmentality, ed. G. Burchell, C. Gordon, and P. Miller, ix–x. Hemel Hempstead: Harvester Wheatsheaf.Google Scholar
  14. Carter, C.B., and J.W. Lorsch. 2004. Back to the drawing board: Designing corporate boards for a complex world. Cambridge, MA: Harvard Business School Press.Google Scholar
  15. Charkham, J. 1994. Keeping good company: A study of corporate governance in five countries. Oxford: Clarendon.Google Scholar
  16. Clegg, S.R. 1989. Radical revisions: Power, discipline and organizations. Organization Studies 10: 97–115.CrossRefGoogle Scholar
  17. Eisenhardt, K.M. 1989. Agency theory: An assessment and review. Academy of Management Review 14: 57–74.Google Scholar
  18. Fligstein, N. 1990. The transformation of corporate control. Cambridge, MA: Harvard University Press.Google Scholar
  19. Foucault, M. 1974. The order of things. London: Tavistock.Google Scholar
  20. Foucault, M. 1979/1988. Politics and reason. In Michel Foucault: Politics, philosophy, culture. interviews and other writings 1977–1984, ed. L.D. Kritzman, 57–85. London: Routledge.Google Scholar
  21. Frankl, V.E. 1959. Man’s search for meaning. Boston, MA: Beacon Press.Google Scholar
  22. Freeman, R.E. 1984. Strategic management: A stakeholder approach. Boston, MA: Pitman.Google Scholar
  23. Hart, O. 1995. Corporate governance: Some theory and implications. The Economic Journal 105: 678–689.CrossRefGoogle Scholar
  24. Hartshorne, C. 1984. Whitehead as central but not sole process philosopher. In Whitehead und der Prozessbegriff (Whitehead and the Idea of Process), ed. H. Holz and E. Wolf-Gazo, 34–38. Freiburg, Munich: Verlag Karl Alber.Google Scholar
  25. Hawley, J.P., and A.T. Williams. 1996. Corporate governance in the United States: The rise of fiduciary capitalism – A review of the literature. Working Paper, Saint Mary’s College of California, School of Economics and Business Administration.Google Scholar
  26. Hayek, F.A. von. 1982. Law, legislation and liberty. London: Routledge & Kegan Paul.Google Scholar
  27. Hayes, R.H., and W.J. Abernathy. 1980. Managing our way to economic decline. Harvard Business Review, July–August, 67–77.Google Scholar
  28. Herman, E.S., and L. Lowenstein. 1988. Efficiency effects of hostile takeovers. In Knights, raiders and targets: The impact of the hostile takeover, ed. J.C. Coffee, L. Lowenstein, and S. Rose-Ackerman, 211–240. New York, NY: Oxford University Press.Google Scholar
  29. Hutton, W. 1995. The state we’re in. London: Jonathan Cape.Google Scholar
  30. James, W. 1909. A pluralistic universe. Lincoln, NE: University of Nebraska Press.Google Scholar
  31. James, W. 1911. Some problems of philosophy. Lincoln, NE: University of Nebraska Press.Google Scholar
  32. Jensen, M.C. 1993. The modern industrial revolution, exit, and the failure of internal control systems. Journal of Finance 48: 831–880.CrossRefGoogle Scholar
  33. Jensen, M.C., and W.H. Meckling. 1976. Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics 3: 305–360.CrossRefGoogle Scholar
  34. Jungerman, J.A. 2000. World in process: Creativity and interconnection in the new physics. Albany, NY: State University of New York Press.Google Scholar
  35. Kay, J., and A. Silberston. 1995. Corporate governance. National Institute Economic Review 153: 84–107.CrossRefGoogle Scholar
  36. Keasey, K., S. Thompson, and M. Wright. 1997. Introduction: The corporate governance problem – Competing diagnoses and solutions. In Corporate governance: Economic and financial issues, ed. K. Keasey, S. Thompson, and M. Wright, 1–17. New York: Oxford University Press.Google Scholar
  37. Keynes, J.M. 1936. The general theory of employment, interest and money. New York, NY: Harcourt, Brace.Google Scholar
  38. Kirkbride, J., and S. Letza. 2004. Regulation, governance and regulatory collibration: Achieving an “holistic” approach. Corporate Governance 12: 85–92.CrossRefGoogle Scholar
  39. Latham, M. 1999. The corporate monitoring firm. Corporate Governance 7: 12–20.CrossRefGoogle Scholar
  40. Leblanc, R., and J. Gillies. 2005. Inside the boardroom: How boards really work and the coming revolution in corporate governance. Mississauga, Ontario: John Wiley & Sons Canada, Ltd.Google Scholar
  41. Loasby, B.J. 1998. On the definition and organisation of capabilities. Revue Internationale de Systémique 12: 13–26.Google Scholar
  42. Manne, H.G. 1965. Mergers and the market for corporate control. Journal of Political Economy 73: 110–120.CrossRefGoogle Scholar
  43. Mayson, S.W., D. French, and C.L. Ryan. 1994. Company law. London: Blackstone Press.Google Scholar
  44. McNulty, T., J. Roberts, and P. Stiles. 2005. Undertaking governance reform and research: Further reflections on the Higgs review. British Journal of Management 16: S99–S107.CrossRefGoogle Scholar
  45. Moerland, P.W. 1995. Alternative disciplinary mechanisms in different corporate systems. Journal of Economic Behavior and Organization 26: 17–34.CrossRefGoogle Scholar
  46. Mohr, L.B. 1982. Explaining organizational behavior. San Francisco, CA: Jossey-Bass.Google Scholar
  47. Morgan, G. 1997. Images of organization, 2nd ed. Thousand Oaks, CA: Sage.Google Scholar
  48. Mueller, F. 1995. Organizational governance and employee cooperation: Can we learn from economists? Human Relations 48: 1217–1235.CrossRefGoogle Scholar
  49. Parkinson, J. 1995. The role of “exit” and “voice” in corporate governance. In Corporate governance and corporate control, ed. S. Sheikh and W. Rees, 75–110. London: Cavendish.Google Scholar
  50. Poole, M.S., A.H. van de Ven, K. Dooley, and M.E. Holmes. 2000. Organizational change and innovation processes: Theory and methods for research. New York: Oxford University Press.Google Scholar
  51. Porter, M.E. 1991. Towards a dynamic theory of strategy. Strategic Management Journal 12: 95–117.CrossRefGoogle Scholar
  52. Pound, J. 1993. The rise of the political model of corporate governance and corporate control. New York University Law Review 68: 1003–1071.Google Scholar
  53. Rescher, N. 1988. Rationality: A philosophical inquiry into the nature and the rationale of reason. New York: Oxford University Press.Google Scholar
  54. Rescher, N. 1996. Process metaphysics: An introduction to process philosophy. Albany, NY: State University of New York Press.Google Scholar
  55. Roy, W.G. 1997. Socialising capital: The rise of the large industrial corporation in America. Princeton, NJ: Princeton University Press.Google Scholar
  56. Sayer, A. 1984. Method in social science: A realist approach. London: Hutchinson.CrossRefGoogle Scholar
  57. Schatzki, T.R., K. Knorr Cetina, and E. von Savigny. eds. 2001. The practice turn in contemporary theory. London: Routledge.Google Scholar
  58. Shiller, R.J. 1989. Do stock prices move too much to be justified by subsequent changes in dividends? In Market volatility, ed. R.J. Shiller, 105–130. Cambridge, MA: MIT Press.Google Scholar
  59. Short, H., and K. Keasey. 1997. Institutional shareholders and corporate governance. In Corporate governance: Responsibilities, risks and remuneration, ed. K. Keasey and M. Wright, 23–60. Chichester: Wiley.Google Scholar
  60. Solomon, R.C., and K.M. Higgins. 1997. A passion for wisdom. A very brief history of philosophy. New York, NY: OUP.Google Scholar
  61. Sternberg, E. 1998. Corporate governance: Accountability in the marketplace. London: Institute of Economic Affairs.Google Scholar
  62. Sykes, A. 1994. Proposals for internationally competitive corporate governance in Britain and America. Corporate Governance 2: 187–195.CrossRefGoogle Scholar
  63. Taylor, C. 1985. Philosophy and the human sciences. Cambridge: Cambridge University Press. (= Philosophical Papers, Vol. 2).Google Scholar
  64. Tsoukas, H. 1992. The relativity of organizing: Its knowledge presuppositions and its pedagogical implications for comparative management. Journal of Management Education 16: 147–162.Google Scholar
  65. Tsoukas, H. 1994. Socio-economic systems and organizational management: An institutional perspective on the socialist firm. Organization Studies 15: 21–45.CrossRefGoogle Scholar
  66. Tsoukas, H. 2001. Re-viewing organization. Human Relations 54: 7–12.CrossRefGoogle Scholar
  67. Tsoukas, H., and R. Chia. 2002. On organizational becoming: Rethinking organizational change. Organization Science 13: 567–582.CrossRefGoogle Scholar
  68. Van de Ven, A.H., and M.S. Poole. 2005. Alternative approaches for studying organizational change. Organization Studies 26: 1377–1404.CrossRefGoogle Scholar
  69. Vickers, G. 1984. The art of judgement. London: Harper & Row.Google Scholar
  70. Weick, K.E. 1977. Enactment processes in organizations. In New directions in organizational behaviour, ed. B.M. Staw and G.R. Salancik, 267–300. Chicago, IL: Saint Clair.Google Scholar
  71. Weick, K.E. 1979. The social psychology of organizing, 2nd ed. New York, NY: McGraw-Hill.Google Scholar
  72. Whitehead, A.N. 1929/1978. Process and reality: An essay in cosmology. Corrected edition D.R. Griffin and D.W. Sherburne. Cambridge: Cambridge University Press.Google Scholar
  73. Whitehead, A.N. 1933/1961. Adventures of ideas. Harmondsworth: Penguin.Google Scholar
  74. Williamson, O.E. 1975. Markets and hierarchies: Analysis and antitrust implications. New York, NY: Free Press.Google Scholar

Copyright information

© Springer Science+Business Media B.V. 2011

Authors and Affiliations

  • Steve Letza
    • 1
  • Clive Smallman
    • 2
  • Xiuping Sun
    • 3
  • James Kirkbride
    • 4
  1. 1.European Centre for Corporate GovernanceLiverpool John Moores UniversityLiverpoolUK
  2. 2.School of Management, University of Western SydneySydneyAustralia
  3. 3.Leeds Business School, Leeds Metropolitan UniversityLeedsUK
  4. 4.London School of Business and FinanceLondonUK

Personalised recommendations