Relational dimensions of corporate governance in translation: networked governance in China and India

The effectiveness of corporate governance mechanisms has been a subject of academic research for many decades. Although the large majority of corporate governance studies prior to mid 1990s were based on data from developed market economies such as the U.S., U.K. and Japan, in recent years researchers have begun examining corporate governance in transition economies. A comparison of China and India offers a unique environment for analyzing the effectiveness of corporate governance. First, both countries state-owned enterprise (SOE) reform strategies hinges on the Modern Enterprise System characterized by the separation of ownership and control. Ownership of an SOE’s assets is distributed among the government, institutional investors, managers, employees, and private investors. Effective control rights are assigned to management, which generally has a very small, or even nonexistent ownership stake. This distinctive shareholding structure creates conflict of interest not only between management (insiders) and outside investors but also between large shareholders and minority investors. Moreover, because both governments desire to retain some control—in part through partial retained ownership of commercialized SOEs, further conflicts arise between politicians and firms. Second, directors in publicly listed firms in both countries are predominantly drawn from institutions with significant non-market objectives: the government and other state enterprises, particularly in China, and extended families, particularly in India. As a result, the effectiveness of internal governance mechanisms, such as the number of independent directors on the board and the number of independent supervisors on the supervisory committee, are likely to be quiet limited, although this has yet to be fully evaluated. Third, because of the political nature of the privatization process itself, typical external governance mechanisms, such as debt (in conjunction with appropriate bankruptcy procedures), takeover threats, legal protection of investors, product market competition, etc., have not been effective. Bank loans have traditionally been viewed as grants from the state designed to bail out failing firms. State-owned banks retain monopoly or quasi-monopoly positions in the banking sector and profit is not their overriding objective. If political favor is deemed appropriate, subsidized loans, rescheduling of overdue debt or even outright transfer of funds can be arranged with SOEs (soft budget constraints). In addition, a market for private, non-bank debt is limited in India and has yet to be established China. There is no active merger or takeover activity in Chinese stock markets to discipline management. Information available in the capital markets is insufficient to keep at arm’s length of the corporate decisions. In light of the above peculiarities, China and India share many of the typical institutional characteristics as a transition economy, including poor legal protection of creditors and investors, the absence of an effective takeover market, an underdeveloped capital market, a relative inefficient banking system and significant interference of politicians in firm management. Su (2005) finds that the extent of political interference, managerial entrenchment and institutional control can help explain corporate dividend policies and post-IPO financing choices in this situation. Allen et al. (2005) demonstrate that standard corporate governance mechanisms are weak and ineffective for publicly listed firms while alternative governance mechanisms based on reputation and relationship have been remarkably effective in the private sector. Because the peculiarities are significant in this context, the differences in the political-economies of the two countries are likely to be evident in such relational terms. In this paper we explore the peculiarities of corporate governance in this transitional environment through a systematic examination of certain aspects of these reputational and relationship dimensions. Utilising the methods of social network analysis we identify the inter-organisational relationships at board level formed by equity holdings and by shared directors. Using data drawn from the Orbis database we map these relations among the 3700 largest firms in India and China respectively and identify the roles played in these relational networks by the particularly characteristic institutions in each case. We find greatly different social network structures in each case with some support in these relational dimensions for their distinctive features of governance. Further, the social network metrics allow us to considerably refine proxies for political interference, managerial entrenchment and institutional control used in earlier econometric analysis.

The implementation of an aeronautical CFD flow code onto distributed memory parallel systems

The parallelization of an industrially important in-house computational fluid dynamics (CFD) code for calculating the airflow over complex aircraft configurations using the Euler or Navier–Stokes equations is presented. The code discussed is the flow solver module of the SAUNA CFD suite. This suite uses a novel grid system that may include block-structured hexahedral or pyramidal grids, unstructured tetrahedral grids or a hybrid combination of both. To assist in the rapid convergence to a solution, a number of convergence acceleration techniques are employed including implicit residual smoothing and a multigrid full approximation storage scheme (FAS). Key features of the parallelization approach are the use of domain decomposition and encapsulated message passing to enable the execution in parallel using a single programme multiple data (SPMD) paradigm. In the case where a hybrid grid is used, a unified grid partitioning scheme is employed to define the decomposition of the mesh. The parallel code has been tested using both structured and hybrid grids on a number of different distributed memory parallel systems and is now routinely used to perform industrial scale aeronautical simulations. Copyright © 2000 John Wiley & Sons, Ltd.

Implementation of a proactive load sharing scheme

This paper presents a proactive approach to load sharing and describes the architecture of a scheme, Concert, based on this approach. A proactive approach is characterized by a shift of emphasis from reacting to load imbalance to avoiding its occurrence. In contrast, in a reactive load sharing scheme, activity is triggered when a processing node is either overloaded or underloaded. The main drawback of this approach is that a load imbalance is allowed to develop before costly corrective action is taken. Concert is a load sharing scheme for loosely-coupled distributed systems. Under this scheme, load and task behaviour information is collected and cached in advance of when it is needed. Concert uses Linux as a platform for development. Implemented partially in kernel space and partially in user space, it achieves transparency to users and applications whilst keeping the extent of kernel modifications to a minimum. Non-preemptive task transfers are used exclusively, motivated by lower complexity, lower overheads and faster transfers. The goal is to minimize the average response-time of tasks. Concert is compared with other schemes by considering the level of transparency it provides with respect to users, tasks and the underlying operating system.

"System in package technology" - design for manufacture challenges

Purpose – To present key challenges associated with the evolution of system-in-package technologies and present technical work in reliability modeling and embedded test that contributes to these challenges. Design/methodology/approach – Key challenges have been identified from the electronics and integrated MEMS industrial sectors. Solutions to optimising the reliability of a typical assembly process and reducing the cost of production test have been studied through simulation and modelling studies based on technology data released by NXP and in collaboration with EDA tool vendors Coventor and Flomerics. Findings – Characterised models that deliver special and material dependent reliability data that can be used to optimize robustness of SiP assemblies together with results that indicate relative contributions of various structural variables. An initial analytical model for solder ball reliability and a solution for embedding a low cost test for a capacitive RF-MEMS switch identified as an SiP component presenting a key test challenge. Research limitations/implications – Results will contribute to the further development of NXP wafer level system-in-package technology. Limitations are that feedback on the implementation of recommendations and the physical characterisation of the embedded test solution. Originality/value – Both the methodology and associated studies on the structural reliability of an industrial SiP technology are unique. The analytical model for solder ball life is new as is the embedded test solution for the RF-MEMS switch.

Reliability based design optimisation for system-in-package

This paper discusses a reliability based optimisation modelling approach demonstrated for the design of a SiP structure integrated by stacking dies one upon the other. In this investigation the focus is on the strategy for handling the uncertainties in the package design inputs and their implementation into the design optimisation modelling framework. The analysis of fhermo-mechanical behaviour of the package is utilised to predict the fatigue life-time of the lead-free board level solder interconnects and warpage of the package under thermal cycling. The SiP characterisation is obtained through the exploitation of Reduced Order Models (ROM) constructed using high fidelity analysis and Design of Experiments (DoE) methods. The design task is to identify the optimal SiP design specification by varying several package input parameters so that a specified target reliability of the solder joints is achieved and in the same time design requirements and package performance criteria are met

Embedding dynamic behaviour into a self-configuring software system

This paper describes a methodology for embedding dynamic behaviour into software components. The implications and system architecture requirements to support this adaptivity are discussed. This work is part of a European Commission funded and industry supported project to produce a reconfigurable middleware for use in automotive systems. Such systems must be trustable against illegal internal behaviour and activity with external origins, additional devices for example. Policy-based computing is used here as an example of embedded logic. A key contribution of this work is the way in which static and dynamic aspects of the system are interfaced, such that the behaviour can be changed very flexibly (even during run-time), without modification, recompilation or redeployment of the embedded application code. An implementation of these concepts is presented, focussing on achieving trust in the use of dynamic behaviour.

A critical evaluation of Enterprise Resource Planning (ERP) software sourcing and provision using theoretical constructs

Deliberating on Enterprise Resource Planning (ERP) software sourcing and provision, this paper contrasts the corporate environment with the small business environment. The paper is about Enterprise Resource Planning client (ERPc) expectations and Enterprise Resource Planning vendor (ERPv) value propositions as a mutually compatible process for achieving acceptable standards of ERP software performance. It is suggested that a less-than-equitable vendor–client relationship would not contribute to the implementation of the optimum solution. Adapting selected theoretical concepts and models, the researchers analyse ERPv to ERPc relationship. This analysis is designed to discover if the provision of the very large ERP vendors who market systems such as SAP, and the provision of the smaller ERP vendors (in this instance Eshbel Technologies Ltd who market an ERP software solution called Priority) when framed as a value proposition (Walters, D. (2002) Operations Strategy. Hampshire, UK: Palgrave), is at all comparable or distinctive.