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The Authority to Propose Issues for Formal Decision in Business Consortia

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  • Scott Herriott

Abstract

One aspect of organizational governance is the power to propose issues for consideration in the formal decision process. Consortia composed of autonomous business organizations appear to be a good context for investigating this “proposal authority,” because when a consortium is not too large it tends to be governed by a board of directors on which all the members are represented. This makes it possible to test hypotheses about the effects of the consortium’s internal structure on the rules that govern who may propose issues for decision and how they may do so. We study here the formal rules, given in organizational charters and by‐laws, for initiating specific types of decision in 53 consortia in the electric power industry in the USA. Hypotheses are developed from numerous theoretical perspectives, including the institutional, ecological, developmental, structuralist, resource‐dependence, economic, and political‐economic. We find a fair degree of heterogeneity in the practices of initiative control among these organizations, yet only the familiar structuralist theory is able to predict significantly the variation in these decision rules. This weak result poses interesting problems for future research.

Suggested Citation

  • Scott Herriott, 1999. "The Authority to Propose Issues for Formal Decision in Business Consortia," Corporate Governance: An International Review, Wiley Blackwell, vol. 7(1), pages 49-61, January.
    • Handle: RePEc:bla:corgov:v:7:y:1999:i:1:p:49-61
    DOI: 10.1111/1467-8683.00128
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