Institutional Transformation and System Change: Changes in Corporate Governance of German Corporations

Lane, Christel (June 2004) Institutional Transformation and System Change: Changes in Corporate Governance of German Corporations. Former Series > Working Paper Series > IHS Sociological Series 65


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Abstract: This paper examines the many changes which have transformed the German system of corporate governance during the last seven odd years. It concludes that it is in the processof converging towards the Anglo-American model and that this has fundamentally affected the way strategic decisions are made in firms. Convergence is not seen as a functional necessity, nor is it viewed as inevitable. The transformation in capital markets and the rise to dominance of the notion of shareholdervalue is particularly affecting large international and quoted firms but is gradually spreading also to other parts of the economy. This transformation is affecting labour and industrial relations in negative ways, as well as posing a threat to the German production model of diversified quality production. The paper offers both a theoretical exploration of institutional and system transformation and an empirical study which substantiates the theoretical position taken with evidence aboutrecent trends in capital markets, banks, government and firms. Evidence from the pharmaceutical/chemical industry is supplemented by data on firms in other sectors, including the financial sector. The theoretical examination of institutional change focuses on the notions of system logic, institutional complementarity, functional conversion and hybridisation. It examines both external sources of change and internal powerful actors who promote the process of transformation. The notions of hybridisation of the German business system, as well as claims about functional conversion and the evolution of a new complementarity, are rejected in favour of a trend towards convergence.;

Item Type: IHS Series
Keywords: 'Corporate Governance' 'Institutioneller Wandel' 'Kapitalmärkte' 'Produktionsregime' 'Koordinierte Marktwirtschaft' 'Industrielle Beziehungen' 'Institutional change' 'Capital markets' 'Varieties of capitalism' 'German coordinated market economy' 'Industrial relations'
Date Deposited: 26 Sep 2014 10:38
Last Modified: 27 Sep 2019 06:18
ISBN: 1605-8011

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