Geopolitics of Governance: Contrasts of Application and Control

Irrespective of having adopted a macro/societal perspective, or more micro/corporate perspectives, the central theme of governance remains as control. The challenge of effective control in modern large-scale enterprises, where there exists a separation of ownership from management, is how that control is exercised with a consideration of the variety of interests in the corporation: shareholders, managers, employees, creditors, government and consumers (Franks and Mayer, 1993). As was highlighted in the previous chapter, the issue of effective and equitable control has led to a focus on only two distinct models of corporate governance: the ‘outside control system’ shareholder value model adopted by the Anglo-American countries; and the ‘network control system’ stakeholder value philosophy adopted by continental Europe, Japan and other economies (ibid.). At the beginning of the twenty-first century, only scant attention is paid to the political model previously mentioned, or to the broad variety of non-capitalist ownership patterns, such as worker ownership and non-profit organizations (Shleifer and Vishny, 1986). Thus the extent to which corporate governance systems have had an impact on private and other smaller, but nevertheless corporate-like companies, which play important roles in nearly all economies, is not addressed effectively in the corporate governance literature, but rather in the SME (small to medium sized enterprise) and the NGO (non-governmental organization) literature of respective economies (Schmidt and Tyrell, 1997).