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The cognitive dimension of corporate governance in fast growing entrepreneurial firms

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  • Wirtz, Peter

Abstract

This article explores the specific morphology and functioning of the governance system of fast growing entrepreneurial firms. Corporate governance is conceptualized as a complex system composed of different mechanisms and various actors, reaching beyond the corporate board and its members. To explain the link between the governance system at large and growth, I build on a general model of corporate governance first proposed by Charreaux (2008), where governance potentially influences managerial behavior through two levers: financial discipline and cognition. I argue that, in the specific case of entrepreneurial firms, corporate governance may play a central role in sustaining high levels of growth through the extensive use of the cognitive lever. Beyond its theoretical implications, the model is also instrumental in providing a consistent framework for an exploration of existing empirical research. I review research specifically devoted to the governance of entrepreneurial firms which experience strong growth and find support for the rationale underlying the proposed model.

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  • Wirtz, Peter, 2011. "The cognitive dimension of corporate governance in fast growing entrepreneurial firms," European Management Journal, Elsevier, vol. 29(6), pages 431-447.
    • Handle: RePEc:eee:eurman:v:29:y:2011:i:6:p:431-447
    DOI: 10.1016/j.emj.2011.06.004
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