This is the accepted version of the paper.This version of the publication may differ from the final published version.  We would like to thank the UK Department for Trade and Industry with support for the research on which this study was based. The authors would like to thank the participants of seminars and workshops at Cass Business School, University of Groningen, University of Auckland, UK AIB Chapter (King's College London), Copenhagen Business School, the editor and two anonymous reviewers for their helpful comments on earlier drafts. The authors are listed alphabetically and contributed equally to this paper. Permanent repository link AN ORGANIZATIONAL APPROACH TO COMPARATIVE CORPORATE GOVERNANCE: COSTS, CONTINGENCIES, AND COMPLEMENTARITIES ABSTRACTThis paper develops an organizational approach to corporate governance and assesses the effectiveness of corporate governance and implications for policy. Most corporate governance research focuses on a universal link between corporate governance practices (e.g. board structure, shareholder activism) and performance outcomes, but neglects how interdependences between the organization and diverse environments lead to variations in the effectiveness of different governance practices. In contrast to such 'closed systems' approaches, we propose a framework based on 'open systems' approaches to organizations which examines these organizational interdependencies in terms of the costs, contingencies, and complementarities of different corporate governance practices. These three sets of organizational factors are useful in analyzing the effectiveness of corporate governance in diverse organizational environments. We also explore how costs, contingencies, and complementarities impact effectiveness of different governance aspects through the use of stylized cases and discuss the implications for different approaches to policy such as 'soft-law' or 'hard law'.

This is the accepted version of the paper.This version of the publication may differ from the final published version.  We would like to thank the UK Department for Trade and Industry with support for the research on which this study was based. The authors would like to thank the participants of seminars and workshops at Cass Business School, University of Groningen, University of Auckland, UK AIB Chapter (King's College London), Copenhagen Business School, the editor and two anonymous reviewers for their helpful comments on earlier drafts. The authors are listed alphabetically and contributed equally to this paper. Permanent repository link AN ORGANIZATIONAL APPROACH TO COMPARATIVE CORPORATE GOVERNANCE: COSTS, CONTINGENCIES, AND COMPLEMENTARITIES ABSTRACTThis paper develops an organizational approach to corporate governance and assesses the effectiveness of corporate governance and implications for policy. Most corporate governance research focuses on a universal link between corporate governance practices (e.g. board structure, shareholder activism) and performance outcomes, but neglects how interdependences between the organization and diverse environments lead to variations in the effectiveness of different governance practices. In contrast to such 'closed systems' approaches, we propose a framework based on 'open systems' approaches to organizations which examines these organizational interdependencies in terms of the costs, contingencies, and complementarities of different corporate governance practices. These three sets of organizational factors are useful in analyzing the effectiveness of corporate governance in diverse organizational environments. We also explore how costs, contingencies, and complementarities impact effectiveness of different governance aspects through the use of stylized cases and discuss the implications for different approaches to policy such as 'soft-law' or 'hard law'.

This article explores links between the firm's financial structure, corporate governance, and the management of labour. It reviews various literatures, in particular drawing from financial economics and political economy, and combines these with industrial relations, and human resource management. We develop a model that identifies how financial institutions and pressures impact upon labour management. Managerial discretion is at the centre of the model, and six key influences and constraints upon management are identified. We present evidence from comparative analysis of labour management which illustrates how management decisions and practices are affected. A benefit of this approach is that it can take account of within-country variations. Copyright Blackwell Publishing Ltd/London School of Economics 2003.