scholarly journals The foundations of governance theory: a case for the resource-dependence perspective

2008 ◽  
Vol 5 (4) ◽  
pp. 164-172
Author(s):  
Krishna Udayasankar
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Domain Knowledge ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Knowledge System ◽  
Dependence Theory ◽  
Alternate Model ◽  
Resource Dependence Perspective ◽  
Epistemological Basis

In this paper I distinguish between the justificatory and explanatory roles of theory, and propose that the justificatory role played in the literature thus far by agency theory is subject to limitations. I therefore argue for the use of resource-dependence theory as the epistemological basis of the corporate governance domain knowledge system, and present an alternate model of corporate governance. Potential contributions of this alternate model are discussed

Does Board Size Matter for Taiwanese Hotel Performance? Agency Theory or Resource Dependence Theory

2017 ◽  
Vol 59 (4) ◽  
pp. 317-324 ◽  
Author(s):  
Jie Wang ◽  
Ming-Hsiang Chen ◽  
Chin-Yi Fang ◽  
Li Tian
Keyword(s):  
Agency Theory ◽  
Resource Dependence ◽  
Positive Impact ◽  
Hotel Industry ◽  
Resource Dependence Theory ◽  
Board Size ◽  
Return On Equity ◽  
Hotel Performance ◽  
Dependence Theory ◽  
Size Matter

Due to the fast growing hotel industry in Taiwan, recent hospitality studies has paid attention to how various factors affect the Taiwanese hotel performance and offered interesting and valuable findings. To expand the financial literature of the Taiwanese hotel industry and the hospitality literature as a whole, this article is the first hospitality study to investigate how board size affects firm performance of publicly traded hotels in Taiwan. Panel regression test results reveal an interesting finding. Specifically, there is an inverted U-shaped relationship between board size and hotel performance in terms of return on assets, return on equity, and Tobin’s Q with an optimal value of board size equal to 10. This indicates that while board size up to 10 has a positive impact on hotel performance (supporting the resource dependence theory), board size can deteriorate hotel performance when it is larger than 10 (supporting the agency theory).

Subsidiary power: Loaned or owned? The lenses of agency theory and resource dependence theory

2019 ◽  
Vol 9 (4) ◽  
pp. 491-501 ◽  
Author(s):  
Alvaro Cuervo‐Cazurra ◽  
Ram Mudambi ◽  
Torben Pedersen
Keyword(s):  
Agency Theory ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Dependence Theory

scholarly journals Attitudes Of Chinese Listed Enterprises Toward Cash Flow Manipulation: A Resource Dependence Perspective

2012 ◽  
Vol 29 (1) ◽  
pp. 263 ◽  
Author(s):  
Huiting Guo ◽  
Fangjun Wang ◽  
Junrui Zhang
Keyword(s):  
Cash Flow ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Font Size ◽  
Accounting Scandals ◽  
Dependence Theory ◽  
Financing Costs ◽  
Flow Manipulation ◽  
Resource Dependence Perspective ◽  
Point Of Departure

<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; line-height: 11.5pt; text-justify: inter-ideograph; mso-pagination: none; mso-line-height-rule: exactly;" class="MsoNormal"><span style="font-family: Times New Roman;"><span class="MsoCommentReference"><span style="color: black; font-size: 10pt; mso-themecolor: text1;">The prevalence of cash flow manipulation has drawn much scholarly attention in China and worldwide, especially since the </span></span><span style="color: black; font-size: 10pt; mso-themecolor: text1;">exposure of the accounting scandals at Enron, WorldCom, and Qwest. Cash flow status also provides a sound basis for corporate valuation. Using a sample of 12,251 firm-year observations from 1999 to 2009, this study thus investigates the attitudes and behavioral patterns of state-owned enterprises (SOEs) and non-SOEs in China toward cash flow manipulation. From a point of departure of resource-dependence theory, we find that non-SOEs tend to manipulate cash flow upward, whereas SOEs are more prone to manipulate cash flow downward. We also demonstrate that non-SOEs are more inclined to manipulate their cash flow statements compared with SOEs. The reason behind this differing behavior could be that non-SOEs are reliant on cash and funds from entities, such as governments and banks, and thus, they falsely enhance cash flow and firm performance in order to signal their solvency and thereby reduce financing costs. By contrast, since SOEs always receive sufficient cash inflows from both government sources and state-owned banks, the managers of these firms are unconcerned about cash flow shortages, which lessens their motivation to manipulate the figures. Indeed, this study finds that these managers may even reduce reported cash flow intentionally in order to obtain government assistance. Therefore, investors and regulators should make their judgments on the cash flow of entities based on their status as SOEs or non-SOEs.</span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>

scholarly journals Towards a Multi-theoretical Approach on the Board and Firm Performance Relationship

2020 ◽  
Vol 36 (2) ◽  
Author(s):  
Nguyen Thu Thuy Tien
Keyword(s):  
Firm Performance ◽  
Agency Theory ◽  
Theoretical Approach ◽  
Resource Dependence ◽  
Integrated Approach ◽  
Resource Dependence Theory ◽  
Limited Range ◽  
Ceo Power ◽  
Managerial Power ◽  
Dependence Theory

Recent reviews of research on company boards and firm performance relationship tend to criticise three of the main traditional theories on boards, namely Agency Theory (AT), Resource Dependence Theory (RDT), and Managerial Power Theory (MPT) for their narrow assumptions and focuses on a limited range of board tasks. This study provides a critical review on these above theories and promotes a direction towards an integrated approach with three important governance factors, namely board capability, board incentives, and CEO power for a better understanding of board-firm performance relationship.

scholarly journals The Impact of Shariah Board on the Performance of Islamic Banks and the Relevance of Shariah Committee (BNM) New Ruling on the Restructuring of Islamic Financing Facility during the Pandemic Crisis

2021 ◽  
Vol 8 (Special Issue) ◽  
pp. 423-443
Author(s):  
Razali Haron ◽  
Nur Ermiedza Radzali ◽  
Naji Mansour Nomran
Keyword(s):  
Panel Data ◽  
Agency Theory ◽  
Resource Dependence ◽  
Social Performance ◽  
Resource Dependence Theory ◽  
Stewardship Theory ◽  
Islamic Banks ◽  
Performance Measurements ◽  
Dependence Theory ◽  
The Impact

This study examines the impact of Shariah Board (SB) characteristics on the financial and social performance of Islamic banks (IBs) from the perspectives of Agency Theory (AT), Stewardship Theory (ST) and the Resource Dependence Theory (RDT). To meet its objective, GMM is employed on a panel data of 15 IBs in Malaysia from 2010 to 2018 covering the pre and post implementation of IFSA 2013 with three performance measurements; ROA and ROE (financial performance) and Zakat over Equity (social performance). SB education, SB reputation, and SB expertise are positively related to IBs performance; while SB remuneration and SB cross membership are negatively related to performance. SB size is found to be insignificant. The study therefore concludes SB is relevant to the performance of IBs. The study also discusses the response of SB at the central bank (SAC-BNM) via its new ruling on financing restructuring in alleviating the hardship of IBs’ customers during the pandemic crisis.

scholarly journals Mainstream theories of corporate governance and the corporate governance – firm performance relationship

2021 ◽  
Vol 5 (3) ◽  
pp. first
Author(s):  
Nguyễn Văn Tuấn
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Agency Theory ◽  
Theoretical Approach ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Depth Information ◽  
Governance Mechanisms ◽  
Firm Financial Performance ◽  
Corporate Governance Mechanisms

This paper reviews the mainstream theories of corporate governance and the relationship between corporate governance structures and firm financial performance. We show that the four predominant theories often employed to study the corporate governance – firm performance relationship are agency theory, stewardship theory, resource dependence theory, and institutional theory. In spite of being an overwhelmingly predominant theoretical approach in corporate governance studies, agency theory has recently been criticized for not fully reflect corporate governance practices in various institutional contexts. It is, therefore, necessary to re-examine the traditional agency framework to understand the corporate governance – firm performance relationship in various institutional environments. There are also calls for the application of a multi-theoretical approach to capture the complex nature of the corporate governance – firm performance relationship. It is also clear from our review that the effect of corporate governance on firm performance is inconclusive as empirical findings concerning this relationship are mixed in different analysis contexts. It is argued that such inconclusive findings of the corporate governance – firm performance relationship may be caused by the national institution differences and the imperfection of estimation techniques. Several recent studies in corporate governance support the view that the implementation of corporate governance mechanisms in a country is influenced by its institutional environment. For this reason, the effectiveness of corporate governance mechanisms also varies from country to country, or in other words, it is country-specific. This suggests that future research focusing on cross-national comparative contexts may provide more insight or in-depth information on the corporate governance – firm performance relationship. We also suggest that the potential mediating impacts of institutional characteristics on the corporate governance – firm performance relationship should be taken into consideration when conducting cross-country comparative corporate governance studies.

scholarly journals Resource-Dependence Theory

Management ◽  
2014 ◽  
Author(s):  
Adam Cobb ◽  
Tyler Wry
Keyword(s):  
Empirical Research ◽  
Resource Dependence ◽  
External Environment ◽  
Resource Dependence Theory ◽  
External Control ◽  
Scholarly Work ◽  
The Core ◽  
Focal Firm ◽  
Dependence Theory ◽  
Resource Dependence Perspective

The resource dependence perspective (hereafter RD) refers to a research tradition that emerged from the basic framework of Jeffrey Pfeffer and Gerald R. Salancik’s classic 1978 work, The External Control of Organizations: A Resource Dependence Perspective (Pfeffer and Salancik 1978, cited under Classic Treatments). The theoretical arguments that serve as RD’s foundation can be summarized as follows: (1) an organization’s external environment comprises other organizations, each with their own interests and objectives; (2) organizations hold power over a focal firm—and may thus constrain its behavior—if they control resources that are vital to its ongoing operation and cannot be acquired elsewhere. RD also highlights a number of strategies that organizations can utilize to deal with problematic dependence relationships; empirical research in this tradition has largely focused on this catalog of strategies. This bibliography is organized by the topic areas covered in External Control and displays representative and impactful work associated with each topic. Though RD’s influence has spread to a number of disparate fields beyond management (Gerald F. Davis and J. Adam Cobb’s article “Resource Dependence Theory: Past and Future” (Davis and Cobb 2010, cited under Reviews and Theoretical Intersections), this article focuses on scholarly work published in management journals and related fields such as strategy and economic sociology which collectively comprise the core RD literature.

Theoretical Perspectives on the Outsourcing of Information Systems

1995 ◽  
Vol 10 (4) ◽  
pp. 209-219 ◽  
Author(s):  
Myun J. Cheon ◽  
Varun Grover ◽  
James T.C. Teng
Keyword(s):  
Information Systems ◽  
Agency Theory ◽  
Resource Dependence ◽  
Theoretical Models ◽  
Resource Dependence Theory ◽  
Theoretical Development ◽  
Transaction Cost Theory ◽  
Contingency Model ◽  
Theoretical Perspectives ◽  
Dependence Theory

Critics have argued that the field of information systems (IS) lacks a coherent theoretical framework. This paper attempts to further the theoretical development of a critical and pervasive contemporary phenomenon, outsourcing of IS functions, by synthesizing four theoretical models (resource-based theory, resource-dependence theory, transaction cost theory and agency theory) that are useful for understanding determinants of a firm's outsourcing strategy. From these theoretical models, a contingency model of outsourcing is developed which can be used to direct empirical research.

scholarly journals The Impact of Board Characteristics on the Financial Performance of Tanzanian Firms.

2016 ◽  
Author(s):  
◽  
Modest Assenga
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Annual Reports ◽  
Outside Directors ◽  
Board Characteristics ◽  
Dependence Theory ◽  
Foreign Directors ◽  
The Impact

This study investigates the impact of board characteristics on the financial performance of listed Tanzanian firms. The study uses two theories of corporate governance to test the hypothesised relationships between board characteristics and financial performance. These are: namely, agency theory; and resource dependence theory and are complemented through the use of a stewardship theory. The study seeks to investigate the impact of the following variables on financial performance i) independent outside directors; ii) board size; iii) CEO duality; and iv) the board diversity aspects of gender, foreign directors and board skill. The study uses a mixed methods approach and applies a convergent parallel design (Creswell & Plano Clark, 2011), collecting quantitative data from annual reports and qualitative data from semi-structured interviews with 12 key stakeholders in corporate governance. Quantitatively, the study examines the balanced panel data of 80 firm-years observations (2006-2013) from the annual reports of 10 Tanzanian listed firms. The findings partially support agency theory since CEO duality was related with a reduction in financial performance. However, the findings do not support a relationship between the proportion of outside directors on boards and financial performance. The study provides some support for aspects of resource dependence theory, since the findings suggest that there is a positive link between gender diversity and financial performance. However, board size, board skill and foreign directors were not found to have a significant impact on financial performance. Furthermore, the interview findings provide some explanations of the relationships between board characteristics and financial performance by suggesting that the impact depends largely on the independence and proficiency of the individual directors on a firm’s board. The study contributes to the understanding of relationships between board characteristics and financial performance. The study uses, for the first time in this kind of research, Tanzanian data and the underutilised approach of mixed methods to corporate governance research. The study provides academic evidence for Tanzanian policy makers in relation to current and future governance reforms.

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