Rethinking Corporate Governance
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Rethinking Corporate Governance

The Forming of Operative and Financial Strategies in Global Corporations

Sven-Erik Sjöstrand

Rethinking Corporate Governance’s extensive and insightful empirical investigation offers a radically new approach to corporate governance. This ground-breaking volume describes and analyses the key nature-based and actor-based forces that ultimately determine corporate governance processes and long-term corporate paths. Generally, such forces work in complex and intricate interplays that to a large extent vary among corporations. The author argues that actions taken by individuals have a special status among those forces, as they not only generate impact in themselves, but also involve interpretations of the possible effects of all the other forces. Among those actions, the ones taken by the shareholders stand out as particularly decisive both for the governance processes as such and for how corporations develop over time.
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Chapter 3: The (re)production of corporate paths

Sven-Erik Sjöstrand

Extract

In this third and final theoretical chapter some of the basics regarding corporate missions, visions, ideas, goals, strategies and (development) paths will be described and linked to the theory of corporate governance presented in Chapter 2. Rather than providing an overview of the state of the art in the strategic management field, this chapter offers a brief description of the basic strategic options that corporations generally face and a review of the forces that shape those options. When discussing corporate paths, uncertainty and risk qualify as key phenomena. As described in Chapter 1, an actor’s ability to act in uncertain conditions is a consequence of resources and experiences, and it is in essence a subjectively formed capability. Uncertainty generally emerges from perceived differences between information needed and information at hand. Thus, it is related to the degree of confidence that actors feel when they intend to act. Uncertainty could also emerge from information overload, that is to say, from an actor’s inability to organize and evaluate abundant and unstructured information. That situation will here be referred to as one of ambiguity.

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