Authors: Karen Schnatterly
Addresses: Trulaske College of Business, Department of Management, University of Missouri-Columbia, Columbia, MO 65211-2600, USA
Abstract: Most governance research has focused on high-level mechanisms operating at the interface of owners and top managers. Yet there is evidence that operational governance mechanisms function within the firm and can be used to prevent value loss. In this study, we supplement the existing evidence of the importance of operational governance mechanisms and examine these mechanisms to assess their association with value creation. We find those operational governance mechanisms such as clarity of policies and procedures, opportunities for communication, a compensation system that rewards more employees for performance and strong accounting systems discriminate among high-, median- and low-value firms, while high-level mechanisms do not.
Keywords: operational governance; agency theory; competitive advantage; firm value; value creation.
International Journal of Strategic Change Management, 2009 Vol.1 No.4, pp.349 - 376
Available online: 02 Feb 2010 *Full-text access for editors Access for subscribers Purchase this article Comment on this article