Lazarides, Themistokles and Drmmpetas, Evaggelos (2009): Fallacies, Collapses, Crises. Now What?
Download (126kB) | Preview
The current crisis has been seen as the result of a “few bad apples”. The paper argues that the crisis is systemic and based on fallacies and misconceptions in the design and function of the economic – corporate system. Organizational and economic theories are based on hypotheses that lead to faulted decisions on how the system should be regulated and designed. The paper proposes that a new theory is needed. Disjoint approaches of the current situation are not suitable. Law, Organization theory, Economics, Finance and Accounting need to converge in order to formulate a theory that encompasses all factors and it is holistic. Introduction of corporate governance systems that are as dynamic as the organizational, ownership, product and capital market are, are necessary in order to create a stable and effective corporate environment.
|Item Type:||MPRA Paper|
|Original Title:||Fallacies, Collapses, Crises. Now What?|
|English Title:||Fallacies, Collapses, Crises. Now What?|
|Keywords:||Crisis, Fallacies, Corporate Collapses, Corporate Governance|
|Subjects:||K - Law and Economics > K2 - Regulation and Business Law > K22 - Business and Securities Law
G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets
F - International Economics > F0 - General > F01 - Global Outlook
G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers ; Acquisitions ; Restructuring ; Corporate Governance
G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L22 - Firm Organization and Market Structure
|Depositing User:||Themistokles Lazarides|
|Date Deposited:||18. Oct 2009 18:28|
|Last Modified:||12. Feb 2013 14:20|
Berle, A.A., Jr and Means, G.C. 1932. The Modern Corporation and Private Property. Commerce Clearing House, Inc., New York, NY.
Cadbury, Sir A. 1992. The Financial Aspects of Corporate Governance: Report of the Committee on the Financial Aspects of Corporate Governance. Gee Publishing: London.
Choo, C. W. 2008. Organizational disasters: why they happen and how they may be prevented. Management Decision, 46: 32-45
Coase, R. H. 1992. The Institutional Structure of Production. American Economic Review, 82: 713-719.
Davis, J. H., Schoorman, F. D. and Donaldson, L. 1997. Toward a Stewardship Theory of Management. Academy of Management Review, 22: 20–47.
Davis, J. L., Payne, G. T and McMahan, G. C. 2007. A Few Bad Apples? Scandalous Behavior of Mutual Fund Managers. Journal of Business Ethics, 76: 319–334.
Dierksmeier, C., and Pirson, M. 2009. Oikonomia Versus Chrematistike: Learning from Aristotle About the Future Orientation of Business Management. Journal of Business Ethics, 88: 417–430.
Donaldson, L. 1990. The Ethereal Hand: Organizational Economics and Management Theory. Academy of Management Review, 15: 369–381.
Donaldson, T. and Preston, L. 1995. The stakeholder theory of the modern corporation: Concepts, evidence and implications. Academy of Management Review, 20: 65-91.
Dong, M, Hirshleifer, D, Rihardson, S, Teoh, SH. 2006. Does investor misvaluation drive the takeover market?. Journal of Finance, 61: 725-762.
Fama, E. F. 1970. Efficient capital markets: a review of theory and empirical work. Journal of Finance, 25: 383–417.
Fama, E. F. 1991. Efficient capital markets: II. Journal of Finance, 46: 1575–1618.
Freeman, R.E. 1984. Strategic Planning: a Stakeholder Approach. Pitman Publishing.
Frey, B. and Osterloh, M. 2004. Yes, Managers Should be Paid Like Bureaucrats. University of Zurich, March: Zurich.
Goodstein, J., Gautam, K. and Boeker, W. 1994. The Effects of Board Size and Diversity on Strategic Change. Strategic Management Journal, 15: 241–250.
Hellwig, M. 1998. On the Economics and Politics of Corporate Finance and Corporate Control. Proceedings of Conference on Corporate Governance of the Institute Catala de Finances Sitges, October 23-24.
Jensen, M. and Meckling, W. 1976. The Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure. Journal of Financial Economics, 3: 305-360.
Jensen, M. C., Murphy, K. J. and Wruck E. G. 2004. Remuneration: where we’ve been, how we got to here, what are the problems, and how to fix them. ECGI Finance Working Paper No 44, available online at http://ssrn.com/abstract=561305 and www.ecgi.org/wp (last access 10/7/2007)
Kaplan, R.S. and Norton, D.P. 1992. The Balanced Scorecard-measures that drive performance. Harvard Business Review, 70(1): 71-80.
Kirkpatrick, G. 2009. The Corporate Lessons From the Financial Crisis, Financial Market Trends. OECD, available on – line at http://www.oecd.org/dataoecd/32/1/42229620.pdf (last access 8/3/2009).
Klapper, L.F., Love, I. 2004. Corporate governance, investor protection, and performance in emerging markets. Journal of Corporate Finance, 10: 703-728.
Lorsch, J. W. and MacIver, E. 1989. Pawns or Potentates: The Reality of America’s Corporate Boards. Boston: Harvard Business School Press.
Mace, M. L. G. 1971. Directors: Myth and Reality. Boston: Division of Research Graduate School of Business Administration Harvard University.
Muth, M. M. and Donaldson, L. 1998. Stewardship Theory and Board Structure: A Contingency Approach. Corporate Governance: An International Review, 6: 5–28.
OECD. 1999. OECD Principles of Corporate Governance. OECD: Paris.
OECD. 2004. OECD Principles of Corporate Governance. OECD: Paris.
OECD. 2006. Methodology for assessing the implementation of the OECD principles on corporate governance. OECD: Paris,
Pearce, J. A. II and Zahra, S. A. 1991. The Relative Power of CEOs and Boards of Directors: Associations with Corporate Performance. Strategic Management Journal, 12: 135–153.
Pfeffer, J. 1972. Size and Composition of Corporate Boards of Directors: The Organization and its Environment. Administrative Science Quarterly, 17: 218–228.
Pfeffer, J. 1973. Size, Composition, and Function of Hospital Boards of Directors: A Study of Organization–Environment Linkage”. Administrative Science Quarterly, 18: 349–364.
Pfeffer, J. and Salancik, G. R. 1978. The External Control of Organizations: A Resource Dependence Perspective. New York: Harper & Row.
Quinn, J. B. 2008. Lawsuit Threatens Sarbanes-Oxley Act. The Washington Post, July 20, 2008, page F01, available online at: http://www.washingtonpost.com/wp-dyn/content/article/2008/07/19/AR2008071900106.html (last access at 10/8/2009)
Shleifer, A., Vishny, R.W. 2003. Stock market driven acquisitions. Journal of Financial Economics, 70: 295-311.
Simon, H. 1985. Human Nature in Politics: The Dialogue of Psychology with Political Science. American Political Science Review, 79: 293-304.
Smith, A. 1776. Wealth of Nations (1991 ed.). Amherst, NY: Prometheus Books.
Turnbull, S. 2005. Why Anglo Corporations Should not be Trusted: And How They Should be Trusted. Corporate Board: Role, Duties & Responsibilities, 1: 10-17.
Vance, S. C. 1983. Corporate Leadership: Boards, Directors, and Strategy. New York: McGraw-Hill.
Vinten, G. 2000. The stakeholder manager. Manager Decision, 38: 377-383.
Vinten, G. 2001. Shareholder versus Stakeholder - is there a governance dilemma?. Corporate Governance: An International Review, 9: 36-47.
Williamson, O. E. 2000. “Why law, Economics, and Organization?. UC Berkeley School of Law, Public Law and Legal Theory, Working Paper No. 37, available on line at http://papers.ssrn.com/paper.taf?abstract_id=255625, last access at 10/12/2008.
Winjnberg, N. M. 2000. Normative Stakeholder Theory and Aristotle: The Link Between Ethics and Politics. Journal of Business Ethics, 25: 329-342.
Zahra, S. A. and Pearce, J. A. II 1989. Boards of Directors and Corporate Financial Performance: A Review and Integrative Model. Journal of Management, 15: 291–334.