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The firm's strategic dynamics and corporate governance life-cycle

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Author Info

  • Igor Filatotchev
  • Steve Toms
  • Mike Wright

Abstract

Purpose – The paper seeks to present a novel conceptual framework that integrates the strategic dynamics of the firm with changes in its governance systems. Design/methodology/approach – The agency research agenda is extended to include other corporate governance roles, such as resource and strategy functions, alongside monitoring and control functions. Theoretical arguments are supported by empirical data related to the founder-manager/IPO, IPO/maturity, maturity/decline and reinvention thresholds. Findings – The paper shows that corporate governance parameters may be linked to strategic thresholds in the firm's life-cycle. Successful transition over a threshold is accompanied by a rebalancing in the structure and roles of corporate governance compared with each previous stage in the cycle. Research limitations/implications – In the absence of longitudinal data relating to firms as they pass through all life-cycle stages the study has been restricted to reporting illustrative data from different studies regarding each strategic threshold. Further research might usefully undertake detailed long-term case studies using a combination of archival and interview data to trace the evolution of firms across the four thresholds. Originality/value – This paper develops a novel conceptual framework that integrates the strategic dynamics of the firm with changes in its governance systems. It rejects the notion of a universal governance template and argues that corporate governance parameters may be linked to transitions from one stage to another in the firm's life-cycle. Accordingly, it argues that changes in a firm's strategic positioning may be associated with rebalancing between the wealth-protection and wealth-creation functions of governance.

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Bibliographic Info

Article provided by Emerald Group Publishing in its journal International Journal of Managerial Finance.

Volume (Year): 2 (2006)
Issue (Month): 4 (September)
Pages: 256-279

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Handle: RePEc:eme:ijmfpp:v:2:y:2006:i:4:p:256-279

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Web page: http://www.emeraldinsight.com

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Related research

Keywords: Corporate governance; Corporate strategy;

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Citations

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Cited by:
  1. Igor Filatotchev, 2008. "Developing an organizational theory of corporate governance: comments on Henry L. Tosi, Jr. (2008) “Quo Vadis? Suggestions for future corporate governance research”," Journal of Management and Governance, Springer, vol. 12(2), pages 171-178, May.
  2. Ekaterina Bjørnåli & Magnus Gulbrandsen, 2010. "Exploring board formation and evolution of board composition in academic spin-offs," The Journal of Technology Transfer, Springer, vol. 35(1), pages 92-112, February.
  3. Massimo Colombo & Philippe Mustar & Mike Wright, 2010. "Dynamics of Science-based entrepreneurship," The Journal of Technology Transfer, Springer, vol. 35(1), pages 1-15, February.
  4. Michele Pizzo, 2013. "Related party transactions under a contingency perspective," Journal of Management and Governance, Springer, vol. 17(2), pages 309-330, May.
  5. Michele Meoli & Stefano Paleari & Silvio Vismara, 2013. "Completing the technology transfer process: M&As of science-based IPOs," Small Business Economics, Springer, vol. 40(2), pages 227-248, February.
  6. Piekkari, Rebecca & Oxelheim, Lars & Randøy, Trond, 2013. "The Role of Language in Corporate Governance: The Case of Board Internationalization," Working Paper Series 974, Research Institute of Industrial Economics.
  7. Szymon Kaczmarek & Satomi Kimino & Annie Pye, 2014. "Interlocking directorships and firm performance in highly regulated sectors: the moderating impact of board diversity," Journal of Management and Governance, Springer, vol. 18(2), pages 347-372, May.
  8. Thomas O'Connor & Julie Byrne, 2013. "Governance and the corporate life-cycle," Economics, Finance and Accounting Department Working Paper Series n248-13.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  9. Igor Filatotchev & Gregory Jackson & Chizu Nakajima, 2013. "Corporate governance and national institutions: A review and emerging research agenda," Asia Pacific Journal of Management, Springer, vol. 30(4), pages 965-986, December.
  10. Aguilera, Ruth V. & Desender, Kurt A. & Kabbach de Castro, Luiz Ricardo, 2011. "A Configurational Approach to Comparative Corporate Governance," Working Papers 11-0103, University of Illinois at Urbana-Champaign, College of Business.
  11. Ekaterina Bjørnåli & Arild Aspelund, 2012. "The role of the entrepreneurial team and the board of directors in the internationalization of academic spin-offs," Journal of International Entrepreneurship, Springer, vol. 10(4), pages 350-377, December.
  12. Kwee, Z. & van den Bosch, F.A.J. & Volberda, H.W., 2010. "The Influence of Top Management Team’s Corporate Governance Orientation on Strategic Renewal Trajectories," ERIM Report Series Research in Management ERS-2010-032-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.

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