|
My research interests lie at the intersection of economic sociology and international business and focus on understanding national economic organization as a configuration of actors—the state, corporate elites, labor, and capital. My main area of research is comparative corporate governance. My overarching research questions are: (a) what factors determine the relationships among stakeholders across countries?, and (b) what organizational and managerial outcomes are generated by corporate governance relationships? In most of my work, I rely on comparative research methods to conduct systematic analyses of economic organization across countries, and I pay particular attention to the role that the nation state plays in influencing economic organization directly and/or in shaping the relationships between different actors indirectly. My main scholarly contribution is the development of a theory of comparative corporate governance and the empirical applications and extensions of this framework.
In the next sections, I explain how my research has progressed and
contributed to the comparative economic sociology and international
business literatures. First, I discuss my work on comparative corporate
governance at the country level, as well as my research examining
corporate governance stakeholders. Second, I summarize the key findings
of my investigations that draw on the comparative corporate governance
framework that Gregory Jackson and I developed [12]
to explain different national systems of corporate governance and
to predict three managerial outcomes: firm internationalization,
mergers and acquisitions, and firm engagement in corporate social
responsibility. I conclude with a synopsis of my future research
projects.
I. COMPARATIVE CORPORATE GOVERNANCE
Corporate governance is the study of the distribution of rights and responsibilities among different participants in the corporation, such as managers, shareholders, the board of directors, and other stakeholders (e.g., employees, suppliers, and consumers). This area of inquiry is at the heart of economic sociology as it explores the social relations between organizational actors and institutions that often have conflicting interests. My research trajectory started with the study of intercorporate relations (e.g., boards of directors), moved into the broader relationships among the different stakeholders in the firm (managers, owners, and employees), and then expanded to incorporate the role of employees within corporate governance systems across countries.
Boards of Directors
I first examined intercorporate relations that are generated from
directorship interlocks and sought to understand why different national
patterns of relationships emerge. This required manually collecting
detailed archival data on 700 boards of directors of the largest
Italian and Spanish firms. I see intercorporate relations as a lens
through which to understand why corporations evolve differently
in different countries (e.g., Spanish banks became internationally
competitive in the 1990s but Italian banks did not). This research
is unusual in that it integrates comparative-historical sociology
with social network analyses. In Aguilera (1998) [13],
I find that the structure of intercorporate relations in Spain had
changed dramatically over twenty years due to the transformation
of the Spanish state and its influence on firm ownership and on
corporate financing regulation. In a follow-up study, Aguilera (2005)
[15], I conducted a systematic historical comparison of the national
cases of Italy and Spain to examine how states have a critical influence
on national economic organization and how those systems of organization
change over time. I employed network methods to categorize the inter-organizational
relationships of these two “most-similar” national cases. In these
two papers, I show empirically that, despite the institutional similarities
of these two late-comers to industrialization, Spain and Italy have
significantly different intercorporate relations due to the role
of the state in influencing financial regulation, state intervention
practices, and foreign investment policy. These two papers make
a notable contribution to the literature on interlocking directorates.
These country-specific findings on interlocking directorates led
me to examine what factors determine the national development of
codes of good governance as well as their world-wide spread across
countries. These codes provide specific guidelines on how boards
of directors should operate. With Alvaro Cuervo-Cazurra, I explore
when and how countries are more likely to develop codes of good
governance [3], [10].
We find that the weaker the country’s corporate law is in regulating
board structure and behaviour, the higher the likelihood that a
given country will develop a code of good governance, although this
effect decreases when we control for degree of foreign investment.
This finding has important implications for the literature on how
governance practices diffuse and/or reach legitimation across countries.
Finally, I have analyzed the accountability role of the board of
directors, and particularly independent directors, across seven
countries in light of institutional contingencies such as the market
for corporate control and recent best practice governance guidelines
such as the United Kingdom’s Higgs Review and the United States’
Sarbanes-Oxley Act [7].
I first compare the structural characteristics of boards at the
country level, and then I show the difficulties to simultaneously
enact a “one-rule-fits-all” policy of board accountability and continue
to generate and maintain the needed trust and openness between the
board members and the CEO.
Stakeholder Relationships
In my research on boards and codes of good governance, I discovered
that business scholars had endorsed a rather narrow view of corporate
governance, often neglecting the role of employees in the corporate
governance system and adopting an under-socialized view of managers
(e.g., agency perspective/shareholder-value view). Hence, Gregory
Jackson and I embarked on the development of a theoretical stakeholder
model of corporate governance [12],
drawing on an actor-centered institutionalist perspective to identify
and explain the diversity of corporate governance systems across
advanced capitalist economies. This approach stresses the interplay
of institutions and firm-level actors and shows how three different
actors (managers, owners, and employees) can have a multitude of
conflicting relationships depending on with whom they cooperate
while competing for the firms’ limited resources. We found that
different configurations of institutions resulted in key interactions
among stakeholders in corporate governance. For example, if there
is an alliance of owners and managers vis-à-vis employees, then
class conflict is likely to emerge, whereas if the alliance is between
managers and employees vis-à-vis owners, then accountability conflicts
will be more salient. This paper made a strong contribution to the
comparative corporate governance literature because it accurately
maps national diversity, allows for multiple institutions to exert
interdependent effects on firm-level outcomes, and engages in the
varieties of capitalism debate.
In addition, I have co-edited a book and written two empirical papers
that explicitly apply our stakeholder model to different countries.
Michal Federowicz and I co-edited a book that has five chapters
on Western European countries and six on Eastern European countries,
all addressing the issues tackled in the stakeholder model of corporate
governance [1]. I also conducted a systematic analysis of the corporate
governance systems of five Latin American countries [19] and find
that institutional characteristics such as stock market development
have a strong effect on the corporate governance system. Further,
Gregory Jackson and I employed set-theoretic methods and used extensive
data on all OECD countries to test the necessary and sufficient
institutional configurations influencing the three stakeholder interactions
that we predicted in our theoretical paper [23]. Our key finding
is that two similar corporate governance systems can be the result
of different initial conditions and a variety of different paths.
For example, not all systems with dispersed ownership have weak
unions and strong corporate law. This research sheds new light on
the traditional corporate governance theories and explains national
cases that did not fit into previous models.
Employees
A significant contribution of my research is showing how a country’s
employment system has important consequences for corporate governance
systems. I have used the theoretical framework that Gregory Jackson
and I developed [12]
as a tool to explore comparatively different employment systems
in three different world regions: Western Europe, Central and Eastern
Europe, and Japan. First, I investigated the historical evolution
of employment relations in Spain in the context of Western Europe,
showing that state policies introduced to increase labor market
flexibility shaped the Spanish corporate governance system by creating
a dual labor market and detaching employees from managers and owners
[2]. Second, Adina Dabu and I have studied the historical transformation
of employment relations in Central and Eastern Europe from the period
when these countries had a quite homogenous employment relations
system as planned economies to the unique employment systems that
each country developed as it transitioned into a market economy
[9]. We find that whether
these countries relied on internal resources (privatizations) or
external resources (foreign investment) to undergo the transition
shaped their future employment systems, and the system of corporate
governance in each country. Third, Dan Jeong and I conducted a rigorous
historical analysis with primary sources that demonstrates how enterprise
unionism in Japan emerged not so much as a result of cultural or
internal labor market explanations, as current theories suggest,
but as a result of socio-political factors—chiefly employee interaction
with management and the Japanese interventionist state [22]. These
three empirical studies shed considerable light on how the nature
of the employment system interacts and shapes the other actors in
the corporate governance system, and co-evolves with them.
II. MANAGERIAL APPLICATIONS OF MY CORPORATE GOVERNANCE MODEL
The second part of my research stream applies my insights from comparative corporate governance to managerial decisions and firm outcomes in three domains: global strategy, mergers and acquisitions, and corporate social responsibility.
Global Strategy
Multinational companies increasingly seek to pursue global strategies,
yet they still face country-specific constraints on their ability
to pursue these strategies. Much of the international business literature
focuses on either external constraints (e.g., the role of trade
and investment barriers imposed by national governments) or internal
constraints (e.g., the difficulty of overcoming autonomy of national
units and managers) on firms. In a series of three papers [4],
[17], and [20], George Yip and I develop a conceptual model proposing
an additional constraint to internationalization that has both external
and internal dimensions: national systems of corporate governance.
In so doing, we combined two previously separate literatures, those
of corporate governance and global strategy. Specifically, we explain
why differences in national corporate governance systems constrain
multinational corporations in their pursuit of a global strategy.
Our model is particularly useful when we compare advanced industrialized
countries and issues regarding outsourcing. Our research has been
discussed in the Financial Times.
Mergers and Acquisitions (M & A)
Corporate governance practices have major implications for all sorts
of firm strategic decisions, including global corporate mergers.
In [11], John
Dencker and I explore how merging firms from different countries
need to integrate the differences in national corporate governance
and human resource management systems depending on the type of merger
that they are pursuing. There is a consensus in the M&A literature
that acquisitions are most likely to fail during the integration
phase. I co-authored three papers that explicitly explore this M
& A integration phase (post-acquisition) by analyzing how an acquisition
will influence the corporate governance practices of management
[8] and boards of
directors [18], looking in particular at turnover outcomes. Dencker,
Yalabik and I also develop a conceptual model to identify the different
institutional pillars that managers in the newly merged firm should
use to effectively socialize employees in the acquired firm during
the integration phase [21].
In line with my interest in inter-corporate relations and corporate
governance, John Dencker, Xavier Escandell, and I analyze data on
the world’s largest merger and acquisition announcements in the
1990s to explore the relational factors that determine their completion
or withdrawal [14]. Existing research on this little understood
phenomenon in the M&A process typically focuses on the characteristics
and actions of acquirer firms to understand financial and strategic
M&A elements. We offer a new perspective by focusing on the dyadic
relationship between acquirer and target firms’ governance teams.
Controlling for strategic and financial factors, we find that the
completion of an announced M&A is more likely to the extent that
the relational capabilities stemming from country-level, industry-level
and organizational-level factors generate a cooperative and trustworthy
relationship.
Corporate Social Responsibility (CSR)
I recently began working with Cynthia Williams, a law professor,
and Deborah Rupp, an organizational psychologist, to pursue inter-disciplinary
insights into corporate governance practices. Our first paper involves
the development of a multi-level theoretical framework of CSR to
identify stakeholders’ motivations to engage in CSR practices [6].
We show that decision-making stakeholders (owners, managers, boards,
and employees) will make CSR choices based on their self-interest,
group-interest, and altruistic interests. Our main contribution
in this conceptual paper is our discussion of the conflicting and
complementary interactions between stakeholders and across levels
(individual, organizational, country, and supra-national). We also
identify the key drivers of current trends towards increased attention
to companies’ social obligations and suggest policy and research
implications.
The next step in this research stream has been to develop two empirical
papers that test our proposed CSR framework. The first one [5] tackles
the organizational and supra-national level by identifying substantial
differences in CSR practices in two countries historically unified
in the corporate governance literature as the “Anglo-American system,”
the U.S. and the U.K. We show that while the U.K. government has
promulgated new corporate social and environmental disclosure regulations
and explicitly embraced a long-term, enlightened shareholder value
construct, the U.S. has not embraced a comparable approach. The
second empirical paper [16] uses firm-level data collected in the
United States and India to confirm one of the propositions in our
CSR framework [6],
that is, the positive impact of firm commitment to CSR initiatives
on employees’ and managers’ perceptions of organizational justice.
III. FUTURE RESEARCH AGENDA
My future research will continue to be interdisciplinary with a focus on international and comparative issues in corporate governance. I have already committed to two inter-related projects on corporate governance in the multinational firm and corporate social responsibility.
Multinational firms are key actors in the business arena, yet little research has been conducted on how these firms organize their corporate governance practices across borders. George Yip and I plan to collect survey and archival data on multinational firms to test the conceptual models that we have developed on the relationship between corporate governance and internationalization issues. Even though it is extremely complex to collect data on international firms, we feel that this empirical analysis will provide credible answers to important questions in the international business literature.
Related to the role of the multinational firm and globalization forces, over the past decade the global business community has been affected by a dramatic shift in social norms about the proper role of business in society. Firms are increasingly facing expectations that they exhibit greater social responsibility in their human resources policies, in their global supply chains and labor policies, and in their environmental policies. We plan to conduct further empirical research by combining multi-method techniques (survey methods, content analysis, and historical analysis) and drawing on our interdisciplinary knowledge, to explore the antecedents, implementation, and consequences of CSR firm engagement across industries and in different national settings.
Taken together, my ongoing projects investigate related issues that should further enhance our understanding of how different institutional forces and stakeholders’ choices influence corporate outcomes that, in turn, will define the society that we live in. I am very excited about the potential for these research projects to advance theoretical understanding, inform empirical knowledge, and influence policy and managerial practices.
REFERENCES
[1] Federowicz, F. and R. V. Aguilera, Eds. (2003) Corporate Governance
in a Changing Economic and Political Environment. Trajectories of Institutional
Change on the Europe Continent. London: Palgrave Macmillan.
[2] Aguilera, R.V. (2005) "Corporate Governance and Labor Relations:
Spain in the European Context." In A. Pendleton and H. Gospel (Eds.),
Corporate Governance and Labour Management: An International
Perspective, pp.197-225. Oxford: Oxford University Press.
[3] Cuervo-Cazurra, A. and R.V. Aguilera (2004) "The Worldwide Diffusion
of Codes of Good Governance." In A. Grandori (Ed.), Corporate
Governance and Firm Organization, pp.318-348. Oxford: Oxford
University Press.
[4] Aguilera, R.V. and G. Yip (2004) "Corporate Governance and Globalization."
In A. Ariño, P. Ghemawat and J. E. Ricart (Eds.), Creating Value
through Global Strategy, pp. 55-67. London: Palgrave.
[5] Aguilera, R.V., C. Williams, Conley, J., and D. Rupp. (forthcoming).
"A Multi-Level Analysis of Corporate Governance and Corporate Social
Responsibility. The Cases of the U.S. and the U.K." Corporate Governance:
An International Review.
[6] Aguilera, R.V., D. Rupp, C. Williams, and J. Ganapathi. (forthcoming).
"Putting the S Back in CSR: A Multi-level Theory of Social Change
in Organizations." Academy of Management Review.
[7] Aguilera, R.V. (2005) "Corporate Governance and Director Accountability:
An Institutional Comparative Perspective." British Journal of
Management, 16: 1-15.
[8] Krug, J. and Aguilera, R.V. (2005) "Top Management Team Effects
in Cross-border Acquisitions: A Literature Review and Discussion
of Future Research Directions." Advances in Mergers and Acquisitions,
4: 123-152.
[9] Aguilera, R.V. and Dabu, A. (2005) "The Transformation of Employment
Relations in Central and Eastern Europe." Journal of Industrial
Relations, 47(1): 16-42.
[10] Aguilera, R.V. and Cuervo-Cazurra, A. (2004) "The Spread of
Codes of Good Governance Worldwide: What’s the Trigger?" Organization
Studies, 25(3): 415-443.
[11] Aguilera, R.V. and Dencker, J.C. (2004) "The Role of Human
Resource Management in Cross-Border Mergers and Acquisitions." International
Journal of Human Resource Management, 15(8): 1357-1372.
[12] Aguilera, R.V. and Jackson, G. (2003) "The Cross-National Diversity
of Corporate Governance: Dimensions and Determinants." Academy
of Management Review, 28(3): 447-465.
[13] Aguilera, R. V. (1998) "Directorship Interlocks in Comparative
Perspective: The Case of Spain." European Sociological Review,
14(4): 319-342.
[14] Aguilera, R.V., J. C. Dencker, and X. Escandell. "Left at the
Altar? A Relational View of Mergers and Acquisition Announcements
in the 1990s," revised and resubmitted at the Administrative
Science Quarterly.
[15] Aguilera, R.V. "National State Differences and Patterns of
Directorship Interlocks: A Comparative Study of Italy and Spain,"
revised and resubmitted at the American Sociological Review.
[16] Rupp, D., J. Ganapathi, R.V. Aguilera, and C. Williams. "Employee
Reactions to Corporate Social Responsibility: An Organizational
Justice Framework," invited to revised and resubmitted at the Journal
of Organizational Behavior.
[17] Aguilera, R. V. and G. Yip. "An Institutional Model of Corporate
Governance Systems and Multinational Globalization," invited to
revise and resubmit at the Journal of International Business
Studies.
[18] Aguilera, R. V. and Y. Li. "Who Stays and Who Goes? A Theoretical
Model to Explain Director Turnover in Acquired Firms," invited to
revise and resubmit at the Journal of Management Inquiry.
[19] Aguilera, R. V. and I. Ermoli. "A Comparative Analysis of Corporate
Governance Systems in Latin America," under review at Journal
of World Business.
[20] Aguilera, R. V. and G. Yip. "Corporate Governance and Global
Strategy," under review at Sloan Management Review.
[21] Aguilera, R. V., J. C. Dencker, and Z. Yalabik "The Complementarities
of Institutional Theory and Organizational Socialization Domains:
The Human Integration in Post-Acquisitions," under review at the
Academy of Management Review.
[22] Jeong, D. Y. and R. V. Aguilera. "The Evolution of Enterprise
Unionism in Japan: A Socio-Political Perspective," under review
at Industrial and Corporate Change.
[23] Jackson, G. and R. Aguilera. "Some Determinants of Diversity
on Cross-National Corporate Ownership: A Fuzzy Sets Approach." RIETI,
Tokyo Working Paper.
Printable Version
|
