Organization: Contemporary Principles and Practice, 2nd Edition

CHAPTER 16

Corporate Governance in New Organizational Forms¹

WHAT THIS CHAPTER COVERS

This chapter begins by pointing out the surprising lack of communication between the study of corporate governance and that of new organizational forms. It describes the growing concern about corporate governance, which is normally regarded as the problem of how to hold managers to account as the agents for stockholders or stakeholders. The chapter examines the agency implications of two developments in organizational form, namely devolved initiative within firms and partnerships between firms. While new organizational forms present new agency challenges, they also offer opportunities for placing corporate governance on a more inclusive basis that may help to heal the serious breach of trust between senior management and employees.

Introduction

Corporate governance and new organizational forms are two of the most frequently visited themes in business and management. They are complementary in that corporate governance is concerned with ways in which managerial agents can be held to account for the attainment of the goals given to firms, while the impetus to develop new forms of organization comes from the need to achieve such goals more effectively in the changing conditions of the contemporary business world.

It is therefore surprising to find that there has been very little communication between ...