http://repub.eur.nl/res/aut/5892/ List of Publications en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/40134/ 2013-01-01T00:00:00Z Unlike the Anglo-Saxon model, whereby ownership of publicly traded companies is typically in the hands of dispersed shareholders, in continental Europe ownership often lies in the hands of what are known as ‘blockholders’. But how does this affect corporate governance, especially when employees, protected by strong labour institutions, are also powerful? http://repub.eur.nl/res/pub/37700/ 2012-05-01T00:00:00Z We offer a multilevel meta-analytic study of the firm performance - executive compensation relationship, comprising prior tests derived from 332 primary studies nested in 29 countries. Although our work modestly supports the optimal contracting theory-based expectation that compensation is positively associated with performance, it also reveals considerable cross-country variability in this relationship. We trace this variance to differences in the level of development of the formal and informal institutions protecting investors against managerial overcompensation and underperformance. In terms of intentionally devised and enforced formal institutions, we find significant positive moderating effects on the focal relationship of the rule of law and strength of investor protection variables. For self-enforcing informal institutions, we find similar effects for concentrated ownership and compensation-related entries in codes of good corporate governance. We also find that formal and informal institutions function in a complementary manner in shaping the performance sensitivity of executive compensation. The focal relationship becomes stronger when concentrated owners have access to well-functioning courts, and when informal norms of good governance are supported by shareholder protection laws. Our study thus suggests that optimal contracting theory must be supplemented with an institution-based view, to account for the conditioning effects of institutions on national contracting environments. http://repub.eur.nl/res/pub/38030/ 2012-04-27T00:00:00Z We provide an analysis of the costs and benefits of blockholding in Europe, where it is a dominant, but certainly not universal, corporate governance strategy for shareholders of publicly listed firms. We find that the effectiveness of blockholding is conditioned by the specific labor institutions that distinguish European countries from the rest of the world, and that these institutional effects involve both competition and cooperation between blockholders and collective labor interests. We also find that relational blockholders are better able to cope with, or benefit from, these institutional effects than arm's-length blockholders. Empirically, we use advanced meta-analytic methods on a total sample of 748,569 firm-year observations, derived from 162 studies covering 23 European countries. http://repub.eur.nl/res/pub/30989/ 2011-09-12T00:00:00Z The prevalence of ownership concentration in Asian firms presents a challenge to the influential agency theory-based understanding of the role of corporate boards. In this paper we develop and test hypotheses about board attributes and firm performance that reflect Asian institutional conditions. We present the first meta-analysis of the relationship between board attributes and performance of Asian firms using a varied set of meta-analytical techniques on a database of 86 studies covering nine Asian countries. First, we find that board structure and composition preferences are influenced by the identity of the concentrated owner. Second, consistent with US data, we find very limited evidence of a direct relationship between board attributes and firm financial performance in the Asian context. Third, we find that the relationship between board structure and composition and firm performance is mediated by the revealed strategic preferences of Asian firms specifically by the level of R&D investment. http://repub.eur.nl/res/pub/23920/ 2011-06-28T00:00:00Z Research on business groups—legally independent firms tied together in various formal and informal ways—is accelerating. Through meta-analytical techniques employed on a database of 141 studies covering 28 different countries, we synthesize this research and extend it by testing several new hypotheses. We find that affiliation diminishes firm performance in general, but also that affiliates are comparatively better off in contexts with underdeveloped financial and labor market institutions. We also trace reduced affiliate performance to specific strategic actions taken at the firm and group levels. Overall, our results indicate that affiliate performance reflects complex processes and motivations. http://repub.eur.nl/res/pub/19925/ 2009-10-01T00:00:00Z The notion of extant social contracts (ESC), which was the original contribution that Tom Dunfee provided to contractualist business ethics (CBE) and Integrated Social Contracts Theory (ISCT) more specifically, has commanded less research attention to date than one would expect based on its apparent empirical face validity and its disciplinary spanning potential. This article attempts to revive the ESC concept in both normative and positive research at the intersection of business, management, and ethics and law. After identifying three features that positively distinguish ESC from ISCT, this article argues that the yet unrealized conceptual potential of ESC is most likely to be cashed out when it is applied to the field of private international business regulation and when it is conceptually connected to the legitimizing perspective of institutional theory. http://repub.eur.nl/res/pub/17687/ 2009-07-01T00:00:00Z We present a meta-analysis of the relationship between concentrated ownership and firm financial performance in Asia. At the cross-national level of analysis, we find a small but significant positive association between both variables. This finding suggests that in regions with less than perfect legal protection of minority shareholders, ownership concentration is an efficient corporate governance strategy. Yet, a focus on this aggregate effect alone conceals the existence of true heterogeneity in the effect size distribution. We purposefully model this heterogeneity by exploring moderating effects at the levels of owner identity and national institutions. Regarding owner identity, we find that our focal relationship is stronger for foreign than for domestic owners, and that pure "market" investors outperform "stable" or "inside" owners whom are multiply tied to the firm. Regarding institutions, we find that a certain threshold level of institutional development is necessary to make concentrated ownership an effective corporate governance strategy. Yet we also find that strong legal protection of shareholders makes ownership concentration inconsequential and therefore redundant. Finally, in jurisdictions where owners can easily extract private benefits from the corporations they control, the focal relationship becomes weaker, presumably due to minority shareholder expropriation. http://repub.eur.nl/res/pub/13229/ 2008-09-12T00:00:00Z In this inaugural address, it is argued that the field of corporate governance is focused too much on the agency problems between managers and shareholders that result from the separation of ownership and control in public companies. It is argued that the currently dominant managerial disciplining model of corporate governance should be broadened by including: (1) the benefits of centralized decision-making and managerial authority in public firms (and other forms of enterprise organization), (2) the distinct corporate governance problems of other forms of enterprise organization, and (3) issues of legitimacy that that arise when corporate actions unlawfully or disproportionally hurt the interests of third parties outside the firm. http://repub.eur.nl/res/pub/11514/ 2008-01-01T00:00:00Z In the face of systemic challenges to corporate legitimacy, scholars and managers alike have been rethinking traditional answers to the question: What does it take to be a good company? We approach this question in two novel ways. We offer a normative answer, grounded in virtue ethics, by introducing a threefold typology of organizational forms. The moral goodness of each form depends on the congruence between its purpose and virtues. But we also offer a positive answer in the form of a processual model which traces corporate goodness to its empirical antecedents and consequences. The model defies a view of organizations as innately good or evil, but rather portrays virtue as the sediment of a value infusion process. We predict that if managers succeed in establishing in their organizations the kind of virtues necessary to support collective moral agency, they can expect to reap gains like enhanced effectiveness and legitimacy. However, when they neglect their moral responsibilities, the result will likely be organizational demise... http://repub.eur.nl/res/pub/12035/ 2008-01-01T00:00:00Z Although the critical reconceptualization of Corporate Citizenship (CC) proposed by Neron and Norman appropriately focuses on connotations that enable us to distinguish between CC and the all-inclusive notion of Corporate Social Responsibility (CSR), I argue that they fail to properly account for the misguiding potential of the features of political citizenship they propose to develop further in CC theorizing. It is concluded that the notion of CC is better dispensed with altogether, and that a reorientation on concepts that can truly transcend the boundaries of economic and political organization would benefit the field of business and society. http://repub.eur.nl/res/pub/9728/ 2007-04-04T00:00:00Z In the face of systemic challenges to corporate legitimacy, scholars and managers alike have been rethinking traditional answers to the question: What does it take to be a good company? We approach this question in two novel ways. We offer a normative answer, grounded in virtue ethics, by introducing a threefold typology of organizational forms. The moral goodness of each form depends on the congruence between its purpose and virtues. But we also offer a positive answer in the form of a processual model which traces corporate goodness to its empirical antecedents and consequences. The model defies a view of organizations as innately good or evil, but rather portrays virtue as the sediment of a value infusion process. We predict that if managers succeed in establishing in their organizations the kind of virtues necessary to support collective moral agency, they can expect to reap gains like enhanced effectiveness and legitimacy. However, when they neglect their moral responsibilities, the result will likely be organizational demise. http://repub.eur.nl/res/pub/12025/ 2007-04-01T00:00:00Z Although McMahon offers a potentially valuable extension of Joseph Raz's conceptualization of authority by distinguishing three different kinds of authority, this paper argues, first, that his account of the conditions and considerations that would justify managerial authority is problematic because it relies on a conception of reasons for action that excludes precisely the kind of rationality that plays an important role in the␣explanation and justification of authority in economic␣organization. This paper explains, second, why McMahon's thesis of the justificatory similarity of authority in governments and nongovernmental organizations can also be seen to hold for corporate governance of publicly owned firms more specifically. Finally, this paper raises some critical objections against McMahon's presumption of democratic governance in governments and NGO's alike. The thrust of these objections is that democratic corporate governance does not make sense in the publicly owned firms because: (1) it will not produce results that are fair or welfare maximizing, and (2) it will undermine the legitimacy of managerial authority in such firms. http://repub.eur.nl/res/pub/11516/ 2007-01-01T00:00:00Z Professor Boatright raises three interesting objections in response to the internal morality of contracting the authors uncover in a previous issue. In response to the criticism of contractualist business ethics that it provides insufficient moral substance, it is argued that the notion of contracting is not a normatively neutral idea because of the normative commitments implied in everyday contracting practices. Thus, contrary to what Boatright claims the authors were not doing, their aim was indeed to show contracting is inherently normative because it contains an internal morality. To substantiate this claim, the authors began by arguing that contracting necessarily involves normative expectations of mutual benefit and effectiveness. These expectations are not only justified - that is, they are reasonably entertained by contractors engaged in contracting practices - but also necessary, because when they are generally lacking people out not understand what is going on as contracting. http://repub.eur.nl/res/pub/11518/ 2006-10-01T00:00:00Z Contractualism is one of the most promising ‘centers of gravity’ in business ethics. In this guest editorial we provide a concise roadmap to the field, sketching contractualism’s historic and disciplinary antecedents, the basic argumentative structure of the contract model, and its boundary conditions. We also sketch two main dimensions along which contributions to the contractualist tradition can be positioned. The first dimension entails positive versus normative theorizing – does a given contribution analyze the world as it is or how it ought to be? The second dimension involves four different levels of analysis that are commonly employed in contractualist business ethics: the nano, micro, meso, and macro levels. We then proceed to position the articles comprising this special issue along these two dimensions. http://repub.eur.nl/res/pub/7894/ 2006-08-14T00:00:00Z Corporate social responsibility (CSR) as a nominal term clearly resonates with scholars and practitioners alike. As a scientific concept, however, it has often been criticized for its lack of definitional precision and poor measurement. In this paper we review and assess intensional and extensional definitions of the concept, as they have figured in the prior CSR literature. But we also go beyond these traditional review exercises by assessing the role (if any) of the concept in positive theorizing. The upshot of this analysis is that since the CSR concept adds nothing of value to existing frameworks in the field of management and organization, such as the economizing and legitimizing perspectives, it is best to discard it altogether. http://repub.eur.nl/res/pub/11531/ 2006-03-01T00:00:00Z Some centers of gravity are finally emerging in the field of business ethics after a decades-long search for action-guiding theories. Among the foremost of these are contractualism and virtue ethics. The former focuses on the morals of economic exchange, the latter on the moral qualities of economic actors. We demonstrate that these dyadic and nodal ethics are not competing contenders to the throne of business ethics, but complementary approaches that are best used in tandem if we want to identify the generic normative core of the field. Specifically, virtue ethicists benefit from contractualists’ aptitude for highlighting the conditions that exchange relationships must meet in order to become vehicles for the pursuit of excellence. In turn, contractualists profit from virtue ethicists’ ability to identify the qualities actors must possess to efficaciously engage in exchange transactions. http://repub.eur.nl/res/pub/11529/ 2006-01-01T00:00:00Z Integrative social contracts theory is arguably the most promising theory of business ethics to date, but often criticized for its inability to produce substantive, action-guiding norms. Rather that imparting moral substance from outside the contractualist framework, or abandoning contractualist business ethics (CBE) altogether, we seek to advance CBE by exploring the internal morality of contracting. We demonstrate that substantive norms for guiding and constraining business conduct can be produced without relying on premises from outside the contractualist framework. http://repub.eur.nl/res/pub/12028/ 2005-01-01T00:00:00Z In a provocative contribution to AMR, Matten and Crane (2005) have sought to shed novel conceptual light on the notion of corporate citizenship (CC). They correctly observe that, to date, research and discussion on CC have consistently lacked conceptual rigor, often stretching the notion of CC to cover a broad array of phenomena that do not seem to be related in any systematic way. Consulting a long and respected tradition of thinking on citizenship in political theory, they propose conceiving of CC “as the administration of a bundle of . . . citizenship rights—social, civil, and political— conventionally granted and protected by governments” (2005: 166), but presently—at least in their view—increasingly becoming the domain of corporate rather than state activity. The authors’ main purpose, to be sure, is descriptive rather than normative. It is to “sharpen our conception of what CC is, and what it is not,” thereby offering “a more informed basis for empirical research.” They also hope to “stimulate conceptual debate” (2005: 167). Have they succeeded? http://repub.eur.nl/res/pub/11596/ 2004-01-01T00:00:00Z Contractualism conceives of firm-stakeholder relations as cooperative schemes for mutual benefit. In essence, contractualism holds that these schemes, as well as the normative principles that guide and constrain them, are ultimately ratified by the consent and endorsement of those subject to them. This paper explores the empirical validity of a contractualist perspective on firm-stakeholder relations. It first develops a typology of firm-stakeholder contracting problems. It subsequently confronts this typology with empirical data collected in an interview study of concrete stakeholder management practices, involving in-depth research interviews with forty-four managers working in the Dutch financial services industry. The findings of this theory-building study suggest that there are limits to the applicability of the contract model in the context of stakeholder management, and that disregarding either the model or its limitations may lead to highly ineffective firm-stakeholder relations. http://repub.eur.nl/res/pub/12033/ 2004-01-01T00:00:00Z This paper challenges a pervasive, if not always explicit assumption of the present state of theorising in business ethics. This is the idea that a workable theory of organizational ethics must provide a unified perspective on its subject matter. In this paper we will sketch the broad outlines of an alternative understanding of business ethics, which focuses on constraints on corporate conduct that cannot reasonably be rejected. These constraints stem from at least three different levels or spheres of social reality, i.e. the preconditions of a well-ordered society, the internal morality of economic activity and the preconditions of autonomous agency. http://repub.eur.nl/res/pub/362/ 2002-05-02T00:00:00Z Although authoritative governance is ubiquitous in modern society, the nature of authority is one of the most neglected and understudied topics in economic, political and organizational theory today. This study aims to correct for this lacuna. Its main conclusion is that there is no such thing as an unambiguous concept of authority. Its is argued that both authority and responsibility in governance should be conceived in institutional rather than conceptual terms, and that the quest for legitimacy that is indissolubly tied up with any understanding of authority, ultimately involves a problem of institutional design. http://repub.eur.nl/res/pub/11604/ 2002-01-01T00:00:00Z Stakeholder theory is a pertinent example of a framework that has been stretched over many conceptual contexts and that has been applied to a wide variety of empirical phenomena. A pressing issue involves the scope of application of stakeholder theory, however, because it is not a comprehensive ethical scheme or problem-solving algorithm. We begin our search for the boundaries of stakeholder management by identifying a presently under-acknowledged yet major underlying assumption, notably that the approach is rooted in voluntary action and association. Building on this presumption, we argue that firm – stakeholder relationships are best to be understood in contractualist terms; i.e. as voluntary arrangements between two or more parties seeking mutual benefit. This assertion subsequently allows us to identify three boundary conditions applying to stakeholder theory: (1) the parties should be sufficiently autonomous; (2) their interests need to be alignable; and (3) they should be capableof living up to their commitments. We substantiate these criteria with evidence from a collective case study of buyer – supplier relationships in the Dutch manufacturing sector, demonstrating that the stakeholder management model fails when these boundary criteria are violated. http://repub.eur.nl/res/pub/11607/ 2001-11-14T00:00:00Z A recent surge in the literature shows that scenario studies are very much back in vogue. The revival of the scenario approach to strategic planning, however, also shows that the method has developed rather one-sidedly both in theory and practice. The dominant trend in scenario thinking is that scenario construction is used primarily as a cognitive exercise, involving mental processes only. In this paper we aim to complement this development by arguing for a more integrated approach, involving both cognitive and “physical” features. Such an approach combines more traditional cognitive elements of scenario studies with, for example, organizational experiments, deliberately made small mistakes, and external corporate ventures. Moreover, we introduce a typology of scenario studies based on two salient assumptions that characterize the field.