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BUS 430 – Session 2 Cross-cultural Management

BUS 430 – Session 2 Cross-cultural Management. Session 2: Corporate Governance Systems. Agenda. Reallocation of teams Critical reflection #1 Discussion#1 Critical reflection #2 Discussion#2 Corporate Governance Systems.

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BUS 430 – Session 2 Cross-cultural Management

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  1. BUS 430 – Session 2Cross-cultural Management Session 2: Corporate Governance Systems

  2. Agenda • Reallocation of teams • Critical reflection #1 • Discussion#1 • Critical reflection #2 • Discussion#2 • Corporate Governance Systems

  3. Comparative and International Corporate Governance - Aguilera and Jackson (2010) • What is corporate governance? • “Corporate governance may be defined broadly as the study of power and influence over decision making within the corporation” • How could it be compared? • Economic and managerial • Cultural and sociological • Legal origin • Political

  4. Economic and managerial • Shareholder primacy and agency concerns • Role of board of directors • Stakeholder based models • Role of banks and unions • Property rights perspective • Role of property rights institutions

  5. Cultural and sociological perspective • Cultural differences and different governance styles • Hofstede’s influence • Cultural differences in accounting practices (discolsure) • Cultural differences in managerial discretion • Cultural differences in financial behavior (leverage etc) • Meritocracy vs. network based management • Type of employment norms (long term vs. hire and fire)

  6. Legal origins perspective • Legal origin – i.e., colonial roots • Endogeniety of legal systems on political history • Investor protection • Property rights protection • Minority vs. majority interests protection • Legal basis of whom the firm should stand for

  7. Political perspective • Political coalitions • Lobbying • Coalition formation • Campaign contributions • Partisan politics • Median voter dictates policies • Election based policies (Worker based vs corporation based policies)

  8. Hostile takeovers and corporate governance - Schneper & Guillén (2004) • Market for corporate control • Hostile takeovers discipline inefficient managers • But hostile takeovers come with a price • Compromise stakeholder interests

  9. Cross-national differences in stakeholder protection • Greater the protection of shareholder rights => greater the occurrence of hostile takeovers • Greater the protection of worker rights => lesser the occurrence of hostile takeovers • Greater the protection to bank’s rights => lesser the occurrence of hostile takeovers

  10. That’s is for today • For our next session we will examine: NATIONAL INNOVATION SYSTEMS

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