The Impact of Corporate Governance on Innovativeness

Diploma Thesis from the year 2005 in the subject Business economics - Business Management, Corporate Governance, grade: 1,0, Technical University of Berlin (Institut für Technologie- und Innovationsmanagement), language: English, abstract: [...] The paper starts with a brief description of the theoretical bases by defining the term Corporate Governance. Further, Corporate Governance’s historical origin is examined and the theoretical assumptions of the two contrasting approaches are described. A short insight is given to the Corporate Governance system in Germany to show that there are differences in national governance systems, especially between the Anglo-Saxon and the German one. For theoretical clarity, the terms innovativeness and entrepreneurship will be defined after. In chapter three, the main part of the paper, empirical findings between the relationship of Corporate Governance mechanisms and innovativeness are examined and the design of control and incentive systems is also discussed. A psychological model, which shows the effects of overemphasizing control or collaboration tensions to Corporate Governance, is then introduced. In the following chapter, the mediating role of culture to Corporate Governance is shown. Additionally, a model of a cultural type is presented, thus making the classification of an organization into four different culture types possible. Finally, my own contingency theoretical framework is constructed, which makes the application of the right theoretical approach to Corporate Governance dependent on the type of culture. The main findings of the paper are that Corporate Governance systems are correlated with innovativeness and that the stewardship approach to Corporate Governance is superior to the agency one in revealing innovativeness.