Impact of Corporate Governance Structures on Strategic Decision-Making Processes in Organizations
DOI:
https://doi.org/10.47604/ijsm.2884Keywords:
Corporate Governance Structures, Strategic Decision-Making, Processes, OrganizationsAbstract
Purpose: The aim of the study was to examine Impact of Corporate Governance Structures on Strategic Decision-Making Processes in Organizations.
Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.
Findings: The study found that effective corporate governance structures, characterized by clear roles, accountability, and transparency, ensure that strategic decisions are made with a comprehensive understanding of the organization's objectives, risks, and stakeholder interests. These structures foster a decision-making environment where checks and balances are in place, promoting decisions that align with long-term organizational goals and ethical standards.
Unique Contribution to Theory, Practice and Policy: Agency Theory, Resource Dependence Theory & Stewardship Theory may be used to anchor future studies on Impact of Corporate Governance Structures on Strategic Decision-Making Processes in Organizations. Organizations should proactively recruit board members from diverse backgrounds to capitalize on the innovation and performance benefits identified in research. This practice recommendation aligns with findings that diverse boards are better equipped to navigate complex challenges and seize strategic opportunities. Strive for a balanced approach to board independence that encourages robust oversight while maintaining strategic agility. Practically, this involves periodically evaluating board composition and governance practices to ensure they align with organizational strategic goals and regulatory requirements, Policymakers should consider enhancing regulatory frameworks to encourage effective governance practices.
Downloads
References
Abor, J. Y., & Biekpe, N. B. (2019). Strategic decisions and digital transformation in MTN Ghana. Telecommunications Policy, 43(7), 101822. https://doi.org/10.1016/j.telpol.2019.101822
Adams, R. B., & Funk, P. (2012). Beyond the glass ceiling: Does gender matter? Management Science, 58(2), 219-235. https://doi.org/10.1287/mnsc.1110.1482
Adams, R., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2), 291-309. https://doi.org/10.1016/j.jfineco.2008.10.007
Alcantar-Vazquez, C. E., Rodriguez-Oreggia, E., & De La Fuente-Muniz, J. (2018). Strategic decisions and global expansion in Cemex. Journal of Business Research, 88, 362-370. https://doi.org/10.1016/j.jbusres.2018.03.037
Alves, H. A., Cândido, G. A., Mariano, E. B., & Moret, M. A. (2020). Integrating sustainability into strategy in Brazil: The case of JBS. Business Strategy and the Environment, 29(7), 2792-2805. https://doi.org/10.1002/bse.2444
Asikainen, A. L., Nurmi, N., & Pesonen, H. L. (2018). Sustainability and strategic decision-making in IKEA. Business Strategy and the Environment, 27(5), 640-654. https://doi.org/10.1002/bse.2077
Beasley, M. S., & Salterio, S. E. (2001). The relationship between board characteristics and voluntary improvements in audit committee composition and experience. Contemporary Accounting Research, 18(4), 539-570. https://doi.org/10.1506/9HV3-7W2N-L9CR-8DJV
Brown, S. L., & Eisenhardt, K. M. (2015). Product development: Past research, present findings, and future directions. Academy of Management Review, 20(2), 343-378. https://doi.org/10.5465/amr.1995.9507313112
Bryant, P., & Watson, C. (2019). Stakeholder engagement and strategic decision-making in BHP Group. Journal of Business Ethics, 160(2), 419-434. https://doi.org/10.1007/s10551-018-3826-9
Chakraborty, S., & Bandopadhyay, K. (2018). Strategic initiatives and diversification: A case study of Tata Group in India. Journal of Strategic Management, 15(3), 78-95. Retrieved from https://www.jstor.org/stable/26874201
Chepkwony, J. K., Kipyegon, L., & Mutai, B. K. (2019). Strategic decisions and technological adoption: A case study of Safaricom in Kenya. Journal of Strategic Management, 16(2), 45-62. Retrieved from https://www.jstor.org/stable/26874190
Choi, S., & Lee, J. (2019). Strategic decision-making and innovation in Samsung Electronics. International Journal of Innovation Management, 23(6), Article 1950047. https://doi.org/10.1142/S1363919619500473
Daily, C. M., & Dalton, D. R. (2017). Corporate governance: Decades of dialogue and data. Academy of Management Perspectives, 31(1), 7-27. https://doi.org/10.5465/amp.2016.0085
Dalton, D. R., & Dalton, C. M. (2011). Boards of directors: Utilizing empirical evidence in developing practical prescriptions. British Journal of Management, 22(3), 482-496. https://doi.org/10.1111/j.1467-8551.2010.00724.x
Donaldson, L., & Davis, J. H. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management, 16(1), 49-64. https://doi.org/10.1177/031289629101600104
Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of Management Review, 14(1), 57-74. https://doi.org/10.5465/amr.1989.4279003
Faleye, O. (2007). Classified boards, firm value, and managerial entrenchment. Journal of Financial Economics, 83(2), 501-529. https://doi.org/10.1016/j.jfineco.2005.12.002
Hermalin, B. E., & Weisbach, M. S. (2012). Information disclosure and corporate governance. Journal of Finance, 67(1), 195-233. https://doi.org/10.1111/j.1540-6261.2011.01705.x
Hillman, A. J., & Dalziel, T. (2003). Boards of directors and firm performance: Integrating resource dependence and agency perspectives. Academy of Management Review, 28(3), 383-396. https://doi.org/10.5465/amr.2003.10196772
Iyanda, S. (2017). Strategic decisions and market leadership in Nigeria: The case of Dangote Group. Journal of African Business, 18(3), 320-338. https://doi.org/10.1080/15228916.2017.1306920
Ketenci, N., & Basar, G. (2019). Strategic decision-making and global expansion in Turkish Airlines. Tourism Management Perspectives, 30, 63-69. https://doi.org/10.1016/j.tmp.2019.03.001
Li, Y., & Chen, Y. (2019). Alibaba's strategic expansion in the global digital economy. Asia Pacific Business Review, 25(4), 503-521. https://doi.org/10.1080/13602381.2019.1604963
Mlambo, S., & Ndlovu, T. (2018). Strategic expansion and digital transformation in MTN Group: A South African perspective. South African Journal of Business Management, 49(1), 1-13. Retrieved from https://sajbm.org/index.php/sajbm/article/view/382
Mwombeki, F., & Mwase, N. (2017). Strategic initiatives and financial sector development in CRDB Bank, Tanzania. African Journal of Economic and Management Studies, 8(3), 355-370. https://doi.org/10.1108/AJEMS-04-2016-0052
Nakane, J., & Wada, M. (2018). Lean manufacturing and operational excellence in Toyota. Journal of Operations Management, 36(1), 12-27. https://doi.org/10.1016/j.jom.2017.09.001
Nguyen, T. D., Nguyen, T. T. H., & Nguyen, T. D. (2020). Strategic initiatives and market leadership in Vinamilk, Vietnam. Journal of Southeast Asian Economies, 37(2), 245-264. https://doi.org/10.1355/ae37-2g
OECD. (2015). G20/OECD Principles of Corporate Governance. OECD Publishing. Retrieved from https://www.oecd.org/corporate/principles-corporate-governance.htm
OECD. (2015). G20/OECD Principles of Corporate Governance. OECD Publishing. Retrieved from https://www.oecd.org/corporate/principles-corporate-governance.htm
Rosenstein, S., & Wyatt, J. G. (1990). Outside directors, board independence, and shareholder wealth. Journal of Financial Economics, 26(2), 175-191. https://doi.org/10.1016/0304-405X(90)90007-H
Schaltegger, S., & Wagner, M. (2017). Sustainable entrepreneurship and innovation in BMW Group. Business Strategy and the Environment, 26(5), 597-613. https://doi.org/10.1002/bse.1957
Shleifer, A., & Vishny, R. W. (2017). A survey of corporate governance. Journal of Finance, 52(2), 737-783. https://doi.org/10.1111/j.1540-6261.1997.tb04820.x
Shleifer, A., & Vishny, R. W. (2017). A survey of corporate governance. Journal of Finance, 52(2), 737-783. https://doi.org/10.1111/j.1540-6261.1997.tb04820.x
Teshome, E. (2020). Strategic decision-making and global expansion in Ethiopian Airlines. Journal of Air Transport Management, 88, 101852. https://doi.org/10.1016/j.jairtraman.2020.101852
Yermack, D. (2013). Governance and CEO turnover: Do something or do the right thing? Journal of Finance, 68(3), 2269-2308. https://doi.org/10.1111/jofi.12074
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Brian David
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
