Title:
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The influence of entrepreneurship on the relationship between corporate goverence and corporate performance
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Three topics very much in the forefront of businessmcns' and politicians' minds today are
corporate governance, entrepreneurship and corporate performance and the relationship between
these three concepts. The terms corporate governance and entrepreneurship would appear to be
contradictory when used in the same sentence. Governance is often associated with regulations
and control, whereas entrepreneurship is more associated with spontaneity and discovering new
ways of creating value. It would seem therefore, that these terms are more mutually exclusive
than compatible.
This apparent incompatibility is evident in business today. Stakeholders in companies are
demanding more accountability in their companies while at the same time demanding consistent,
if not, rising returns on their investments. To improve accountability requires the utilisation of
increasingly scare resources - the same resources that companies require to improve their
financial returns.
This author is interested in investigating this apparent incompatibility. Therefore the aim of this
thesis is to examine "The influence of entrepreneurship on the relationship between corporate
governance and corporate performance ".
The first step of this research was to examine the relationship between corporate governance and
corporate performance. This was done by reviewing the factors that drive corporate governance
and understanding how these factors can influence corporate performance. The second step was
to examine the effect that entrepreneurship can have on corporate performance and the final step
was to assess* the effect of entrepreneurship upon corporate governance and corporate
performance. This approach was derived from the literature review and the conceptual
framework adopted by this author, which was influenced by the work of Shields and Taialli
(2006). As a result of this approach this author made a number of propositions which formed the
basis of the research.
In order to research these propositions, the case study methodology was adopted. The
applicability of this methodological approach is supported by Yin (2003), Dube and Pare (2003)
and Benbasat et al. (1987). To carry out the research six US based high technology companies
were selected for in depth research. Data sources were selected primarily from those available in
the public domain, due to the fact that a number of the companies researched had ceased trading
at the time the research was carried out. The data was collected with a clear understanding of the
strengthsa nd weaknesseso f each data collection technique. The data was then analyseda nd the
evidence documented.
The main theoretical conclusions derived from this research were as follows. It was concluded
that corporate governance should be studied in its entirely rather than in its individual constituent
components; the role and types of blockholders have changed over time but these changes are not
yet adequately understood; traditional methods of aligning the interest of shareholders and
management are no longer appropriate and need to be reassessed;t here is a need to better
understand the role of corporate founders in companies once they are no longer majority
shareholders and there is a need to know how to promote and measure entrepreneurship at the
individual company level. All these issues have an impact on the corporate governance,
entrepreneurshipa nd corporatep erformancer elationship and therefore need to be understood.
The main managerial conclusions derived from this research were as follows. The importance of
the appointment of Chief Governance Officers at board level was found to be vital. Equal
importance needst o be given to all shareholdersa nd not just to the largest shareholders. There is
a need for continuity in the boardroom and it is necessary to re-evaluate the form and content of
management executive plans. Finally, benchmarks for the measurement of entrepreneurship at
the corporate level have yet to be developed.
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