Hierarchical Inconsistency: A Monitoring Mechanism to Reduce Securities Fraud in Emerging Markets

2021 ◽  
Author(s):  
Yidi Guo ◽  
Xiaowei Rose Luo ◽  
Danyang Li
Keyword(s):  
Emerging Markets ◽  
Organizational Structures ◽  
Securities Fraud ◽  
Social Hierarchies ◽  
Checks And Balances ◽  
Corporate Elite ◽  
Governance Effectiveness ◽  
Corporate Securities ◽  
Monitoring Mechanism ◽  
Weak Rule

Research has indicated limited effects of formal governance measures on securities fraud prevention in emerging markets due to the weak rule of law. We propose that hierarchical inconsistency, misaligned rank ordering in formal organizational and informal social hierarchies of the corporate elite, can provide a novel monitoring mechanism to reduce securities fraud. Leaders at the top of the two inconsistent hierarchies can feel distressed and motivated to engage in contestation and challenge each other’s authority, thus providing checks and balances and preventing groupthink. This monitoring effect is likely to be stronger when either of the two heads has dominant and unequivocal superiority in their respective hierarchy, making them particularly distressed by the hierarchical inconsistency and prone to contest. We test our argument in the context of publicly listed family-controlled firms in China, where business and family hierarchies may confer superiority to different individuals. Our study contributes to the corporate securities fraud literature by understanding how formal organizational structures and informal social relationships interact and jointly influence governance effectiveness in emerging markets.

scholarly journals A Quasi-Global Mindset: Psychological and Structural Factors That Made Japanese MNCs Succeed in the West and Struggle in China

2018 ◽  
Vol 4 (1) ◽  
pp. 18
Author(s):  
Katsuhiko Shimizu
Keyword(s):  
Emerging Markets ◽  
External Environment ◽  
Organizational Structures ◽  
Developed Countries ◽  
Global Mindset ◽  
Structural Factors ◽  
Senior Executives ◽  
The West ◽  
Business Environments ◽  
Eastern Cultures

The aim of this study is examining why many Japanese MNCs, which are embedded in Eastern cultures, were successful in the late 1970s and 1980s in Western markets, but have struggled in Eastern emerging markets such as China since the mid-2000s. The success of Japanese MNCs in Western developed countries, whose cultural, institutional, and business environments are very different from the Japanese market, suggests that Japanese managers were developing global mindsets. Thus, their recent struggle in China, which should have more commonalities with Japanese markets than Western markets, is a puzzle and should provide important implications for both researchers and practitioners. Based on the results of exploratory interviews with senior executives of ten large Japanese MNCs, we proposed the idea of a quasi-global mindset, which characterizes Japanese managers’ mindsets that are not truly global but are subjectively global. To the extent that managers erroneously believe they have a global mindset and that traditional organizational structures and systems block opportunities to recognize the problem, managers cannot understand the real problems and thus falsely attribute difficulties to the external environment. This study provides important implications to Japanese MNC managers as well as other MNC managers in terms of articulating the importance as well as the difficulties in obtaining true global mindset.

scholarly journals Ownership monitoring mechanism and corporate performance: evidence from banking firms in Asian emerging markets

2008 ◽  
Vol 5 (3) ◽  
pp. 349-357
Author(s):  
Abdul Hadi Zulkafli ◽  
Fazilah Abdul Samad ◽  
Izani Ibrahim
Keyword(s):  
Corporate Governance ◽  
Hong Kong ◽  
Financial Crisis ◽  
Emerging Markets ◽  
Firm Value ◽  
Financial Firms ◽  
Monitoring Mechanism ◽  
Asian Emerging Markets ◽  
Corporate Governance Reforms ◽  
Governance Reforms

Corporate governance is regarded as a major issue during the post-financial crisis period in Asia. These countries have implemented corporate governance reforms to enhance the protection of their shareholders and stakeholders interests. Such reforms may affect the conduct of business of all corporations in the region as it allows for greater monitoring especially by the shareholders. Unlike earlier studies which focused on non-financial firms, this study analyzes the corporate governance involving ownership monitoring mechanism of listed banking firms in nine Asian emerging markets which are Malaysia, Thailand, Philippines, Indonesia, Korea, Singapore, Hong Kong, Taiwan and India. It is found that ownership monitoring mechanisms of the banking firms in Asian emerging markets are negatively related with firm value measured by Tobin’s Q

scholarly journals Menimbang Kewenangan DPR dalam Penggunaan Hak Angket Pada Kasus Korupsi KTP Elektornik

Lentera Hukum ◽  
2019 ◽  
Vol 6 (1) ◽  
pp. 163
Author(s):  
Fahmi Ramadhan Firdaus ◽  
Bayu Dwi Anggono
Keyword(s):  
House Of Representatives ◽  
Control Function ◽  
The Other ◽  
Constitutional Court ◽  
Checks And Balances ◽  
State Institutions ◽  
Monitoring Mechanism ◽  
The Law ◽  
The Right

In Indonesia, the control function of the House of Representatives (DPR) includes interpellation rights, inquiry rights and the right to express opinions. In 2017, the DPR's inquiry rights to the Corruption Eradication Commission (KPK) were considered unconstitutional because the law did not include the KPK as the object of the inquiry mechanism. However, the Constitutional Court (MK) in Decision Number 36 / PUU-XV / 2017 defined KPK as an executive so that this institution can be monitored through the inquiry mechanism. This court's decision, however, contradicts to the four previous decisions which classified KPK as an independent institution. This article examines the validity of the DPR's inquiry rights to the KPK by considering the DPR's inquiry rights as a form of a mechanism for mutual checks and balances to the other state institutions. In practice, there are both formal and material rules that must be fulfilled so that their implementation is legally valid and the DPR's inquiry rights to the KPK in cases of the electronic KTP corruption ignore these conditions. This article recommends that the DPR be careful when using inquiry rights as a monitoring mechanism. Keywords: Inquiry rights, House of Representatives, Corruption Eradication Commission

scholarly journals Challenges in Strategy and Management of Multinational R&D Centers in Emerging Markets: Perspective from a German Headquarters in the Chemical Sector

2013 ◽  
Vol 12 (1) ◽  
pp. 54-83
Author(s):  
Osmar Mitsuo Saito ◽  
Roberto Carlos Bernardes ◽  
Flávia Luciane Consoni ◽  
Bruno Rondani
Keyword(s):  
Emerging Markets ◽  
Exploratory Study ◽  
Organizational Management ◽  
Organizational Structures ◽  
Emerging Countries ◽  
Multinational Company ◽  
Developed Markets ◽  
China And India ◽  
Multiple Case ◽  
Management Capabilities

The expansion of multinational company (MNCs) operations abroad represents an observed trend for decades. The news is that in recent years the research and development (RD) activities also have become internationalized, including more intensified focus on emerging countries. Among the implications is the challenge for the MNCs to implement effective organizational structures with the intention to facilitate the articulated coordination of strategies and RD management between the headquarters and their global RD centers. The purpose of this study is to evaluate the strategy from the perspective of the corporate headquarters of a multinational company and the challenges in the formulation of the global RD strategy and management of each center located inemerging and developed markets. For this reason, we developed an empirical research based on qualitative multiple case exploratory study in a German chemical MNC company in its five global RD centers located in Germany (headquarters), USA, Brazil, China and India. The results suggested the needs to creation of organizational management capabilities for constant re-evaluation of its RD strategy in order to capture the demands and the temporary windows of opportunities from these markets. These capabilities lead to reducing the strong observed centralization level and assigning more responsibilities to the subsidiaries with global RD center status.

scholarly journals Development of Business Schools in Emerging Markets: Learning through Adoption and Adaptation

2020 ◽  
Vol 12 (20) ◽  
pp. 8448
Author(s):  
Camelia Ilie ◽  
Gaston Fornes ◽  
Guillermo Cardoza ◽  
Juan Carlos Mondragón Quintana
Keyword(s):  
Emerging Markets ◽  
Business Models ◽  
Business Schools ◽  
Theory Development ◽  
Organizational Structures ◽  
International Standards ◽  
Business Practices ◽  
Local Leadership ◽  
Global North ◽  
Local Impact

The purpose of this study is to contribute to the understanding of the critical resources and capabilities that business schools (BS) have developed to achieve sustainable development. Framed within the resource-based theory, it analyzes seven of the top 50 BS from emerging markets (EM). It argues that these schools have grown through a development process of adopting and adapting business models, including teaching and research methodologies, organizational structures, and business practices; when they consolidated their local leadership, they started to follow a more idiosyncratic process. The findings shed light on the challenges that schools from EM face to deliver local impact while being measured by international standards and have implications for theory development, practice, and policymaking. In terms of theory, the findings show how the Global North model has exerted a determining influence in the development path of BS in EM, and, subsequently, how the pressure to respond to domestic demands has guided the acquisition of resources and the development of capabilities. For practice, the study reveals development patterns, clues about the challenges these BS face, and the range of solutions they have implemented. For policymaking, the case studies offer valuable lessons on how governments can design support systems for BS development.

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