ACE research vignette 040: Three steps towards more corporate entrepreneurship within an organisation

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepreneurship researchers. In this vignette, Henri Burgers investigates what managers can do to make their firm more entrepreneurial.

Participative behaviour of organisational leaders: The perspective of the Bhutanese corporate sector

Explored in this study are the participative behaviour of organisational leaders in the emerging for-profit sector in Bhutan. Leaders engage primarily in verbal participative behaviour with subordinates when making organisational decisions especially if they believe in the importance of the contribution of participation to organization effectiveness. Leaders who believe in high power distance however are less likely to engage in both verbal participative behaviour and consultative participative behaviour. The research contributes to our understanding of participative decision making by identifying dimensions of participative behavior in the context of emerging economies.

Analysis of construction dispute review boards

This paper presents the results of a research project undertaken to assess the impact of DRBs on the construction program of a large scale highway agency. Three dimensions of DRB impact were assessed: (1)influence on project cost and schedule performance, (2) effectiveness of DRBs in preventing and resolving construction disputes, and (3) costs of DRB implementation. The analyses encompass data from approximately 3,000 projects extending over a 10 year period (2000-2009).

Corporate-cooperative management of fisheries: A potential alternative governance structure for low value small fisheries?

While the economic and environmental benefits of fisheries management are well accepted, the costs of effective management in low value fisheries, including the research necessary to underpin such management, may be considerable relative to the total economic benefits they may generate. Co-management is often seen as a panacea in low value fisheries. Increasing fisher participation increases legitimacy of management decision in the absence of detailed scientific input. However, where only a small number of operators exist, the potential benefits of co-management are negated by the high transaction cost to the individual fishers engaging in the management process. From an economic perspective, sole ownership has been identified as the management structure which can best achieve biological and economic sustainability. Moving low value fisheries with a small number of participants to a corporate-cooperative management model may come close to achieving these sole ownership benefits, with lower transaction costs. In this paper we look at the applicability of different management models with industry involvement to low value fisheries with a small number of participants. We provide an illustration as to how a fishery could be transitioned to a corporate-cooperative management model that captures the key benefits of sole management at a low cost and is consistent with societal objectives.

Stakeholder pressures on corporate climate change-related accountability and disclosures: Australian evidence

This study investigates stakeholder pressures on corporate climate change-related accountability and disclosure practices in Australia. While existing scholarship investigates stakeholder pressures on companies to discharge their broader accountability through general social and environmental disclosures, there is a lack of research investigating whether and how stakeholder pressures emerge to influence accountability and disclosure practices related to climate change. We surveyed various stakeholder groups to understand their concerns about climate change-related corporate accountability and disclosure practices. We present three primary findings: first, while NGOs and the media have some influence, institutional investors and government bodies (regulators) are perceived to be the most powerful stakeholders in generating climate change-related concern and coercive pressure on corporations to be accountable. Second, corporate climate change-related disclosures, as documented through the Carbon Disclosure Project (CDP), are positively associated with such perceived coercive pressures. Lastly, we find a positive correlation between the level of media attention to climate change and Australian corporate responses to the CDP. Our results indicate that corporations will not disclose climate change information until pressured by non-financial stakeholders. This suggests a larger role for non-financial actors than previously theorized, with several policy implications.

Applying metaethical and normative claims of moral relativism to (shareholder and stakeholder) models of corporate governance

There has, in recent decades, been considerable scholarship regarding the moral aspects of corporate governance,and differences in corporate governance practices around the world have been widely documented and investigated. In such a context, the claims associated with moral relativism are relevant. The purpose of this paper is to provide a detailed consideration of how the metaethical and normative claims of moral relativism in particular can be applied to corporate governance. This objective is achieved, firstly, by reviewing what is meant by metaethical moral relativism and identifying two ways in which the metaethical claim can be assessed. The possibility of a single, morally superior model of corporate governance is subsequently considered through an analysis of prominent works justifying the shareholder and stakeholder approaches, together with a consideration of academic agreement in this area. The paper then draws on the work of Wong (Moral relativity, University of California Press, Berkeley, CA, 1984, A companion to ethics, Blackwell, Malden, 1993, Natural moralities: A defense of pluralistic relativism,Oxford University Press, Oxford, 2006), firstly in providing an argument supporting metaethical moral relativism and secondly regarding values of tolerance and/or accommodation that can contribute to the normative claim. The paper concludes by proposing an argument that it is morally wrong to impose a model of corporate governance where there are differences in moral judgements relevant to corporate governance, or to interfere with a model in similar circumstances, and closes with consideration of the argument’s implications.

Corporate governance convergence and moral relativism

Research question / issue This paper frames the debate on corporate governance convergence in terms of the morality underlying corporate governance models. The claims and arguments of moral relativism are presented to provide theoretical structure to the moral aspects of corporate governance convergence, and ultimately the normative question of whether convergence should occur. Research findings / insights: The morality underlying different models of corporate governance has largely been ignored in the corporate governance convergence literature. A range of moral philosophies and principles that underlie the dominant corporate governance models are identified. This leads to a consideration of the claims and arguments of moral relativism relating to corporate governance. A research agenda around the claims of Descriptive and Metaethical moral relativism, and which ultimately informs the associated normative argument, is then suggested. Theoretical / Academic implications The application of moral relativism to the debate on corporate governance convergence presents a theoretical structure to the analysis and consideration of its moral aspects. This structure lends itself to further research, both empirical and conceptual. Practitioner / Policy implications The claims and arguments of moral relativism provide a means of analysing calls that are made for a culturally or nationally ‘appropriate’ model of corporate governance. This can assist in providing direction for corporate governance reforms and is of particular relevance for developing countries which have inherited Western corporate governance models through colonialism.

The ethics of corporate governance: A (South)African perspective

Purpose – The purpose of this paper is to review the developments in South African corporate governance since the end of apartheid, with a view to identifying themes and points of convergence and/or divergence with other models. Design/methodology/approach – The paper presents a critical review of South African corporate governance in the context of political and economic developments. Where relevant, aspects of corporate governance theory (in particular the stakeholder and shareholder debate) are considered in the South African context. Findings – South African corporate governance can be seen to broadly follow Anglo‐American examples with the notable exception of the stakeholder approach of the two King reports. This approach emphasises the responsibilities of companies to various stakeholders and encourages stakeholder engagement as an integral element of company strategy. There has not, however, been any substantial incorporation of stakeholder interests into formal corporate governance structures such as board structure and financial reporting. Practical implications – The ongoing consideration of corporate governance developments in South Africa is important for its continued development in the country and the region. Originality/value – A review of South African corporate governance is timely given the probable release of the third King report in 2009, together with new company legislation.

Theorising South Africa's corporate governance

South Africa’s principal corporate governance report aspires to an ‘inclusive’ approach to corporate governance, in which companies are clearly advised to consider the interests of a variety of stakeholders. Yet, in common with many other countries, there is little discussion of the theoretical foundations and assumptions implicit in the recommended approach to corporate governance. The purpose of this article is to provide an analysis of corporate governance and the corporate environment in South Africa in terms of existing theory and models of corporate governance, and to provide a critique based on a consideration of traditional African values and the socio-economic necessities of post-apartheid South Africa. The result is the identification of an incompatibility between the current corporate environment in South Africa and the given exposition of African values. Some prospects for change are then identified.

Stand-out progress from our corporate first-movers

In May, the National Business Leaders Forum on Sustainable Development meets for the 10th time. More than ever business leadership is needed to help us all address the challenges around climate change, water availability and species loss. Here’s a quick look at some committed corporate stars...

The importance of group-fit in new director selection

Purpose Director selection is an important yet under-researched topic. The purpose of this paper is to contribute to extant literature by gaining a greater understanding into how and why new board members are recruited. Design/methodology/approach This exploratory study uses in-depth interviews with Australian non-executive directors to identify what selection criteria are deemed most important when selecting new director candidates and how selection practices vary between organisations. Findings The findings indicate that appointments to the board are based on two key attributes: first, the candidates’ ability to contribute complementary skills and second, the candidates’ ability to work well with the existing board. Despite commonality in these broad criteria, board selection approaches vary considerably between organisations. As a result, some boards do not adequately assess both criteria when appointing a new director hence increasing the chance of a mis-fit between the position and the appointed director. Research limitations/implications The study highlights the importance of both individual technical capabilities and social compatibility in director selections. The authors introduce a new perspective through which future research may consider director selection: fit. Originality/value The in-depth analysis of the director selection process highlights some less obvious and more nuanced issues surrounding directors’ appointment to the board. Recurrent patterns indicate the need for both technical and social considerations. Hence the study is a first step in synthesising the current literature and illustrates the need for a multi-theoretical approach in future director selection research.

A social licence to operate: Corporate social responsibility, local communities and the constitution of global production networks

This article contributes to the theorization of the role of informal regulation (undertaken by leading firms) in the ongoing organization of global production networks. It does so through a qualitative case study of BHP Billiton's Ravensthorpe Nickel Operation (RNO) in the rural Shire of Ravensthorpe in Western Australia. This less tangible, and to date under-researched, dimension of global production networks is foregrounded through a focus on the corporate social responsibility strategy implemented by RNO in the service of achieving and/or demonstrating a broader ‘social licence to operate’. This ‘licence’ functions – beyond the corporation – as a legitimated and legitimating multi-scalar mechanism through which to gain and maintain access to mineral resources and thus to establish viable and ongoing global production networks. Further, this informal regulation is shown to shape social relations and qualities of place conducive to competitive global mineral extraction and to facilitate the positioning of local communities and places in mineral global production networks.

Corporate Governance in the 21st Century: Japan's Gradual Transformation

The 'lost' decade of economic stagnation in Japan during the 1990s has become a 'found decade' for regulatory and institutional reform. With nearly all areas of the 'law in the books' reviewed, revised and rewritten, the Japanese legal system is no longer the system that foreign commentators felt they were finally starting to understand by the 1980s. Nowhere is this more evident than in corporate governance. Corporate and securities legislation has been comprehensively revamped over 1993-2007, creating a more flexible and transparent regime for shareholders and managers. Financial markets law and regulatory institutions have changed, too, creating a new context for Japan's 'main banks' as alternative or additional outside monitors of managerial performance in borrowing firms. Even the legislation surrounding labour regulations has been amended, reinforcing the lifelong security privileges for elite employee-stakeholders, yet also hastening the growth of other atypical employment relationships. But how do such legislative reforms affecting key players in Japanese firms, covering areas central to the design of Japanese capitlaism, play out in the 'law in action'? Overall, this book argues that a significant gradual transformation has occurred. Although this is evident also in other advanced industrialised democracies, such as Germany, Japan reveals especially complex interactions in the various fields that sometimes emphasise different ways of achieving such transformation.

Fundraising and boards: be a leader and a meddler!

The old board maxim says, ‘Be a leader not a meddler’! However, in the case of board members and fundraising, meddling is wise. Why? Because the board has a responsibility and a unique opportunity to guide and support its organisation’s fundraising. Indeed, in successful nonprofit organisations (NPOs) fundraising is an attitude, not a department.

From mountaintop to corporate ladder: What new professionals really really want in a capstone experience!

Capstone subjects are increasingly used in Universities worldwide to complete the undergraduate program experience and to transition graduates into the workplace. As such, capstones fulfil a large role consolidating one experience and traversing the gap to another. Yet, little is known or understood about their design, their implementation or evaluation. In this study we investigate the final-year experience from the student's perspective. We surveyed graduates from five Business Schools in Australia to identify perceptions of their final-year experience. Findings indicate that the transition experience of the student to professional is unique. In their liminal or intermediate state between student and professional they recognise the value of process skills, in particular the development of generic business skills related to application and the importance of opportunities for experiencing the application of theory in practice. The findings add a new understanding to the current literature which has not previously acknowledged the insight of the transitioning professional.