Corporate governance and stakeholder conflict

Authors: Michael Carney Eric Gedajlovic Sujit Sur

Publish Date: 2010/02/04

Volume: 15, Issue: 3, Pages: 483-507

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Abstract

The stakeholder management literature is dominated by the ‘shareholder value’ and ‘inclusive stakeholder’ views of the corporation Each views the governance problem in terms of interfunctional conflicts between stakeholder groups such as between investors and managers or managers and employees and rests on the assumption of an idealized corporate structure characterized by the separation of ownership from management Our review of corporate governance and stakeholder conflict shows that such functionalbased characterization is too simplistic and fails to account for important intrafunctional conflict Through a comparative review that considers managerial stakeholder and family systems of governance we demonstrate that while the modality of conflict varies by system substantial intrafunctional conflict is endemic to each We integrate the findings of the agency and comparative stakeholder theories of corporate governance to offer an authoritybased framework with three different governance structures that offers complementary insights into stakeholder conflicts Thus our study highlights the important but often neglected intrastakeholder type of conflict in various organizations and provides a basis for understanding their various manifestations and consequences under the different systems of governance

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