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In this classic text, Masahiko Aoki explores how the 2008-9 financial crisis demanded a re-examination of the role of corporations and the working of financial markets around the world, providing a compelling new analysis of the corporate firm; the role of shareholders, managers and workers; and institutional governance structures.
In recent decades the firm has predominantly been seen as an organization run and governed in the interests of shareholders, where management act as the agent of shareholders, and the workers simply as instruments for share-value maximization. This book reverses this viewpoint. It sees corporations as associational cognitive systems where 'cognitive actions' are distributed amongst managers and workers, with shareholders supplying 'cognitive tools' and monitoring their use in the systems. Aoki analyses the different relationships that can exist between shareholders, managers, and workers from this perspective, and identifies a range of different models of organizational architecture and associated governance structures. He also discusses ways in which corporations act as players in social, political, and organizational games, as well as global economic games; how these inter-related social dynamics may change particular distinctive national structures into the diversity incorporated in the global corporate landscape; and how they now call for new roles for financial markets.
List of contents
- 1: Introduction: What Do Corporations Do?
- 2: Frames of Corporate Cognition and Governance
- 3: Societal Games that Corporations Play
- 4: How do Institutions Evolve?
- 5: The Evolving Diversity of the Corporate Landscape: "Convergence to Diversity"?
About the author
Masahiko Aoki was the Henri and Tomoye Takahashi Professor Emeritus of Japanese Studies in the Department of Economics, and a senior fellow of the Stanford Institute of Economic Policy Research and the Freeman Spogli Institute for International Studies at Stanford University. He was a theoretical and applied economist with a strong interest in institutional and comparative issues. He specialized in the theory of institutions, corporate architecture and governance, and the Japanese and Chinese economies.
Summary
The 2008-9 financial crisis demands we look anew at the role of corporations, and the working of financial markets around the world. In this book, Masahiko Aoki provides a compelling new analysis of the corporate firm; the role of shareholders, managers and workers; and institutional governance structures.
Additional text
A pioneering contribution which formalizes in game theoretic language complex institutional structure and environment of the corporation both at a moment of time and over time.
Report
An intriguing read. Ethical Corporation Magazine
