Question:
Critically analyse of the influence of Corporate Governance upon the process of doing business.
The governance institutions provide the framework within which economic, and social life of the country is centred. The corporate governance would imply the exercise of the power by the corporate entities. The firms they perform based on the corporate governance so that it is more productive and when there is long existing life cycle of the product. Due the failure of the firms and collapse of the institutional levels has led to the growth of the new theories and concepts on the way the organization is run (Epstein & Buhovac 2014). In the researches that has been performed earlier it was observed that the firm and his management and survival of the organization was related to the management type that is in the context of the global competitive environment and place which would be requiring corporate governance (Marquis & Lee 2013). The research study will help in the examination of the organization’s healthy corporate governance. This will be helpful in into looking into the factors which would be necessary for building a relationship of success with the Directors of the Board , corporate governance mechanism, corporate ethics , shareholder responsibilities , responsibilities and structure of the boards and organization Audit.
The research will be focusing on the corporate governance in organization in Nigeria and then look into the mechanism through which it relates to corporate governance which would be helping in proper management for the effective productivity. There is importance of corporate governance with the closing down of the banks of Nigeria due the decision made by the unprofessionally by the people of the board. The approach will not only streamline the corporate governance dimension to some form of interest so there is a very limited corporate governance dilemma (Chin, Hambrick & Treviño , 2013). There is a competing corporate system of governance in the Anglo American system, the relationship based European system and relationship based system of Asia specific. The institutional, cultural, historical differences are the basis of corporate governance. The strategic choice for the governance system determination would be needing flexibility is the crafting of the business contexts so that the changes happening in the corporations can respond to the changes in the competition , technologies , optimal organization and the vertical patterns of the network. There is a need to follow governance forms and ownerships through the obtaining of the diversity of governance and economic regulations. The business organization is directed and controlled through the corporate governance (Mason & Simmons, 2014). The different participants would be realising their responsibilities and the rights in an organization through the corporate governance.
There is a renewed interest in the practices of corporate governance in the modern organizations since the year 2001 due to the collapse of the high profiled firms like MCI Inc and Enron Corporations. There is a broad and bold efforts are made to reforms corporate governance as per the desires and the needs of the shareowners for the exercising of the rights of corporate governance and for increasing the value the shares. The responsibility of the corporate directors has increased with the rise in the loyalty towards the shareowners and the corporations. From the various quarters, the term corporate governance is a misunderstood phase and ambiguous phase due to the misunderstood phase. This was mainly seen to be attached to corporate management. This was not only a management perspective but the coverage is much broader. It should also be including the efficient, transparent and fair administration so that the certain well-defined objectives are met (Filatotchev & Nakajima, 2014). The use of corporate governance must go beyond law. The managerial disclosure and frequency in financials , the degree to which there is exercise of the responsibilities by the Board of Directors and the commitment to run a more transparent type of an organization. The study will help in the execution of the ideal ways of implementation of corporate governance. The focus is in the impact of corporate governance on the organizational performance.
The main aim of the study is to see that there is an influence of the corporate governace on the performance of the organization
The following are the research objectives considered for the research:
The following are the research questions for this research:
There is a growing importance to understand the impact of the corporate governance on the productivity of the firm and there are major contributions made. This relationship will be enhancing the view of the firm on the corporate governance and the way it affects the productivity of the firm (Page & Spira, 2016). The firms will be able to restructure the corporate governance for creating effectiveness. This would be giving a lot of insight to the organization on the various factors doe the sound practices of governance. There will be greater relevance and role-played by the stakeholders of the firm. With the implementation of corporate governance, there would be more benefits for the firms.
The research will be revealing that there is a need for the corporate governance for the separation of the ownership and the governance a business framework. The interest of those having effective control over the firm will be able to have differing interest that would be having effective control who would be differing their interest who would be supplying the firm with some finances. The interest of the shareholders would be detrimental due to the principal agent problem, which is reflected by the management activities. Good governance is reflected through the disclosure and transparency. This is only possible through the opening of the purpose, which would be helpful in achieving it. This will be helpful in building trust on the people who would be dependent. The flow of the resources in the companies will be inspiring more trust through the governance approach and through the management of the integrity. The enterprise is encouraged and trust will be developed through the responsible governance.
There involves a holistic approach to the study of the corporate framework which helps in the integration of the interest of the stakeholders which would be including ethical behaviour of the management, shareholders , understanding the way the activities of the organization affects the environment , social , economic and government.
Figure: Basic components proposed showing corporate governance framework
Stakeholder are any person where the individual or the company that are affected by the operations of the organization (Jo & Harjoto, 2012). They will be harmed or would be benefited or the rights will be respected by the operations of the organization. The main stakeholders include creditors, shareholders, directors, employees, suppliers, government and community from where the organization they would be getting the raw materials. The organization would not be having any fraud people (Dahan, Hadani & Schuler, 2013). An organization that takes into consideration the well-being of the person quite seriously and the interest of the employees are considered in the decision-making. This would be difficult for the employee to collide for fraud (Harrison & Coombs, 2012). With the ethical instruction to the suppliers, that they associate with the ethical suppliers or this will lead to reduced rate at which the suppliers will source for resource unethically (Tricker, 2015).
This is a system of moral principle and is considered with the behavioural ideas about the bad and the good moral. The holistic model takes into account that there should be incorporation of ethics in the framework of corporate governance (Goyal, Rahman & Kazmi, 2013). Corporate governance governs the way the organizations are controlled and directed. There is a need for considering the moral behavior of the people in the affairs of the organization in corporate governance (Bhat, 2013). The main reason for this is that this people make the decisions of the organisation. The decision that is made by the organization will be influenced by the good moral. There will be better governance in the organization. This is why there is a need of the incorporating of ethics in the corporate governance (Francis Hasan & Wu, 2015).
There is a growing concern of the environment, economic and social concept in the bottom line in the organization. The bottom line refers to the loss and profit as both the loss and profit are recorded in the bottom line of the income statement of the organization. The addition of these concerns with the bottom line is referred to as the triple bottom line (Hafsi & Turgut 2013). The argument with respect to this is that there is a need for showing the real economic profit. The profit is shown by the organization through the deduction of the cost of the goods from the net revenue earned. The cost may be more than that of the cost of operating and the goods that are sold.
There is a need for the organization to measure the profit i.e. the bottom line of the loss and profit of the account (Goyal, Rahman & Kazmi, 2013). The second bottom line would involve organizations people account. This help in understanding the way socially responsible an organization and the operation towards its employees and other type of people in the environment (Rowley, Shipilov & Greve, 2016). The third bottom line of the organization involves organization planet account. This helps in the measurement on the way environmentally responsible an organization. The tripe bottom line will be consisting of the people profit and planet (Larcker & Tayan, 2015). The triple bottom line will be used for the corporate governance.
The research hypothesis for this research is as follows:
H0: There is influence of corporate governance on the process of doing business
H1: There is no influence of corporate governance on the process of doing business
The research methodology is a very important section, as this will help in understanding what method is undertaken by the researcher to conduct the research. There will be deeper analysis of the subject through the methodology adopted.
The researcher to conduct an in depth understanding of the subject will be using the positivism research philosophy. The positivism would be done based on the empirical and the statistical data. The data through the positivism will help in testing the data through the human emotions (6 & Bellamy, 2012). The statistical data will used in this research. The data would be of the discrete nature. The hypothesis will be proved through the use of statistical data in the research.
The research approach is mainly of two types and they are inductive and deductive. The theories of the research paper will be tested using the deductive approach. The theories will be validated and deduced. The respondents who are being used in the research will be helpful in understanding the deductive approach and a right conclusion can be arrived (Supino & Borer, 2012). The deductive method will help in making a strong base for the subject of the research.
The research design is divided into exploratory, explanatory and descriptive. This is the framework where the research is to be conducted. The different type of approaches will help in better understanding of the research. The exploratory research is a type of research where the new avenues are researched. The hypotheses are also not maintained. The researcher will explore for the hypothesis. In case explanatory research, it would help in stating the occurrence of the society that is quite repetitive. In case of descriptive type of research , the researcher will be following a hypothesis that is already present so that there is a further analysis and research carried out.
The researcher will be carrying out a descriptive research for understanding the relationship of corporate governance with the process of business. With the use of the descriptive method there will be correct analysis would also be made for the same.
In order to conduct the research on the topic, the researcher has taken up secondary method of research for framing the literature review. The secondary sources of the data involves magazines, websites , business journals which will help in the understanding of the past data. The sources from where the articles are taken are Science Direct, Google Scholar and Research Gate (Love, 2012). There are some journals, which are freely available on the internet was relevant for the given topic. This will be helpful in the analysis of the research topic. The secondary analysis is a cost effective way as the information is easily available on the internet than the primary collection of the data (Oakshott, 2012). The past data on the journals and the primary data collected will be helpful in conducting a perfect analysis.
Sampling in a research is very important, as the entire population is cannot be used in the purpose of the research. There are two types of sampling techniques i.e. the probabilistic and non-probabilistic (Goodson, Loveless, & Stephens, 2012). The researcher will be using the probabilistic sampling, which involves the simple random sampling. The researcher will be framing the questions for the research, which would be distributed to the 50 employees of the reputed bank in Nigeria. There are 4 managers of the bank who are taken for the research to whom qualitative questions has been asked. This would be helping in the thematic analysis. The convenience sampling is used for the managers as per their accessibility.
The data has been collected through the primary and the secondary sources. The primary collection of the data is based on the quantitative and the qualitative analysis. The quantitative data was collected from the 50 employees of a Nigerian bank. The questionnaire was distributed to the personally which only included close ended questions. The employees need to select the options with respect to each of the questions. The researcher uses the 5 point likert scale for understanding the relation of the topic. The information that the research gets will then be analyzed (Fortune, Reid, & Miller, 2013). The statistics of the research will help in putting forward a deeper understanding of the study. The qualitative data will be collected with respect to the interview from the 4 managers of a bank in the Nigeria. The interview with respect to the managers was considered based on their convenience. The responses that were provided will be analysed based on the subject (Buglear, 2012).
The focus group was mainly in respect two groups they are the employees and managers of the bank in Nigeria. Qualitative question will be asked to the managers while the quantitative questions will be asked to the employees.
The analysis of the data will be done with respect to the qualitative and quantitative data. Qualitative analysis will help in learning the perspective of the managers and Quantitative analysis of the employees responses will be done with the use of the statistical models, use of Ms Excel functions and pie charts. The quantitative data helps in the performing of the descriptive analysis. The descriptive statistics would be involving the mean median mode and standard deviation of the data. The hypotheses are tested through the Type I and Type II errors.
The following is the organization for the study:
Chapter One:
This chapter will be explaining the research proposal for the topic that is considered for the research.
Chapter Two:
This chapter will help in the detailed analysis of the study for considering the impact of the corporate governance on the business performance and identifying the factors that will be affecting the business.
Chapter Three:
This is the methodology chapter that would be helpful for the researcher to conduct the research. The methodology would be including the secondary research i.e. the use of the literature reviews, primary collection of the data, observing the indicators and analysis of the data for completing the research.
Chapter Four:
This chapter helps in the elaborating the discussing and the finding for the chapter that would be helpful in case of reporting.
Chapter Five:
This chapter would be considering the overall result of the topic that is to be researched and making recommendations on the ways of restoring corporate governance in a bank.
The timetable used for the research is:
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Main activities |
1st week |
2nd week |
3rd week |
4th+5th week |
6th week |
7th week |
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Selection of topic |
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Literature review and study of existing theories |
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Research methodology |
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Data collection- primary |
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Analysis of data and interpretation |
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Findings |
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conclusion |
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Final work and submission |
The budget for the research would be around 4000 dollars for completing the research The allocation of the amount is done on the basis of the time table:
References:
6, P. & Bellamy, C. (2012). Principles of methodology. London: SAGE.
Bhat, G. (2013). Impact of disclosure and corporate governance on the association between fair value gains and losses and stock returns in the commercial banking industry. Available at SSRN 1013926.
Buglear, J. (2012). Quantitative methods for business and management students. Harlow: Pearson.
Chin, M. K., Hambrick, D. C., & Treviño, L. K. (2013). Political Ideologies of CEOs The Influence of Executives’ Values on Corporate Social Responsibility. Administrative Science Quarterly, 58(2), 197-232
Dahan, N. M., Hadani, M., & Schuler, D. A. (2013). The governance challenges of corporate political activity. Business & Society, 0007650313491470.
Epstein, M. J., & Buhovac, A. R. (2014). Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Berrett-Koehler Publishers.
Felício, J. A., Gonçalves, H. M., & da Conceição Gonçalves, V. (2013). Social value and organizational performance in non-profit social organizations: Social entrepreneurship, leadership, and socioeconomic context effects. Journal of Business Research, 66(10), 2139-2146.
Filatotchev, I., & Nakajima, C. (2014). Corporate governance, responsible managerial behavior, and corporate social responsibility: Organizational efficiency versus organizational legitimacy?. The Academy of Management Perspectives, 28(3), 289-306.
Fortune, A., Reid, W., & Miller, R. (2013). Qualitative research in social work. New York: Columbia University Press.
Francis, B., Hasan, I., & Wu, Q. (2015). Professors in the boardroom and their impact on corporate governance and firm performance. Financial Management, 44(3), 547-581.
Goodson, I., Loveless, A., & Stephens, D. (2012). Explorations in narrative research. Rotterdam: SensePublishers.
Goyal, P., Rahman, Z., & Kazmi, A. A. (2013). Corporate sustainability performance and firm performance research: literature review and future research agenda. Management Decision, 51(2), 361-379.
Hafsi, T., & Turgut, G. (2013). Boardroom diversity and its effect on social performance: Conceptualization and empirical evidence. Journal of Business Ethics, 112(3), 463-479.
Harrison, J. S., & Coombs, J. E. (2012). The moderating effects from corporate governance characteristics on the relationship between available slack and community-based firm performance. Journal of Business Ethics,107(4), 409-422.
Jo, H., & Harjoto, M. A. (2012). The causal effect of corporate governance on corporate social responsibility. Journal of business ethics, 106(1), 53-72.
Larcker, D., & Tayan, B. (2015). Corporate governance matters: A closer look at organizational choices and their consequences. Pearson Education.
Love, K. (2012). Ethics in social research. Bingley, U.K.: Emerald.
Marquis, C., & Lee, M. (2013). Who is governing whom? Executives, governance, and the structure of generosity in large US firms. Strategic Management Journal, 34(4), 483-497.
Mason, C., & Simmons, J. (2014). Embedding corporate social responsibility in corporate governance: A stakeholder systems approach. Journal of Business Ethics, 119(1), 77-86.
Oakshott, L. (2012). Essential quantitative methods for business, management and finance. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan.
Page, M., & Spira, L. F. (2016). Corporate governance as custodianship of the business model. Journal of Management & Governance, 1-16.
Rowley, T. J., Shipilov, A. V., & Greve, H. R. (2016). Board reform versus profits: The impact of ratings on the adoption of governance practices.Strategic Management Journal.
Supino, P. & Borer, J. (2012). Principles of research methodology. New York, NY: Springer.
Tricker, R. B. (2015). Corporate governance: Principles, policies, and practices. OUP Oxford.
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