Agents, stakeholders and corporate governance in Russian firms

Article Abstract:

This paper considers some developments within Russian privatized industrial firms 1992-94 through the lens of Stakeholder-Agency Theory (SAT). Although it has its own shortcomings and weaknesses, SAT, unlike the traditional financial version of Agency Theory, at least contemplates the possibility of a transitional period during which enterprise governance structures can evolve. It is by now widely recognised that in the middle of deep economic crisis, the Russian economy is too volatile for longitudinal studies of formally structured samples of firms over a period of time. In any case, SAT is at a stage of development that has not yet yielded detailed predictions for scientific testing. Yet surveys of recently privatized firms in Russia do provide empirical data away from the origins of SAT, and it is argued that this fresh data suggests new research propositions that can hopefully lead to more theoretical refinement and ultimately testing. At the very least, SAT can be used as a heuristic device, capable of providing a way of looking at complex Russian developments in a structured way. A process of Russian privatization through management-employee buy-outs involving giveaway distributions of shares has secured the compliance of the two main groups of enterprise stakeholders who could have prevented the withdrawal of the State from the governance of industrial enterprises, but has not yet produced a form of corporate governance structure that is likely to survive in the long term without State protection. In the longer term, international competitiveness can only be secured in Russia through investment in new products and processes, and the inadequacies of managers and other employees as sources of investable funds mean that incumbents must generate a more welcoming climate for outside investors. Even after such a short period since privatization and in the middle of a deep economic crisis, some enterprises are already favouring more efficient governance structures in a way consistent with SAT. (Reprinted by permission of the publisher.)

Analysis, Corporate governance, Russia, Privatization, Privatization (Business), Agency theory

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Strategy Research in Emerging Economies: Challenging the Conventional Wisdom: Guest Editors' Introduction

Article Abstract:

The introduction to this special issue identifies the four strategic options typically examined in business research: agency theory, resource-based theory, transaction cost theory, and institutional theory. While most studies focus on the last two theoretical types, the authors support a shift of focus onto the first and second.

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Understanding Business Group Performance in an Emerging Economy: Acquiring Resources and Capabilities in Order to Prosper

Article Abstract:

Research on more than 224 business groups in China's emerging economy indicates that groups are more likely to prosper if they take strategic actions needed for developing market-oriented capabilities and resources.

China, Economic aspects

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