- "The World is converging on the American system of corpora...
"The World is converging on the American system of corporate governance". Discuss
In the corporate world of today, profit margins are shrinking in
every industry and it is becoming increasingly difficult to retain
one's customers due to the phenomenal increase in competition
levels, employees and their intellectual capital are difficult to
retain by satisfying them both monetarily and psychologically, and
the investors are becoming increasingly demanding over long-term
and short-term gains. In such a scenario, appeasing the three main
stakeholders in the firm, namely customers, employees and investors
(Zenger et al, 1999) translates to nothing short of a highly
complex balancing act.
Following a critical analysis of the American form of Corporate
Governance and the movement of other economies towards this form of
governance, it can be observed that there is a marked convergence
towards this form of governance, with especially the new economies
of developing countries moving from a relationship-based governance
to the American system. However, the existence of country-specific
idiosyncrasies means that the transition would be a gradual one and
not a radical transformation.