Wirtschaftswissenschaftliche Fakultät

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Corporate Governance


Corporate Governance issues are predominant in all types of organizations and all over the world and differ among different types of firms. Governance problems arise when resources cannot perfectly be allocated by market mechanisms or contracts. While a corporation or organization is in general only an empty legal shell, the interactions and transactions of individuals within this shell require authority and hierarchy to coordinate and motivate the interests of the individual members of the organization. Individuals at the top of a hierarchical pyramid could use their power to extract private rents at the cost of a firm’s stakeholders and underinvestment. While this phenomenon or “managerial misbehavior” is often ascribed and reduced to large and public companies with dispersed shareholders, all types of organizations, profit or not-for profit, are characterized by and suffer from the moral hazard and adverse selection problems at the top of their pyramids.

Our research program focuses on three types of firms: Entrepreneurial firms, medium sized and family owned firms, and large and public companies. All three types of firms are faced with an increasing international competition in input and output markets but differ in their size and ownership structures and are thus faced with specific kinds of governance problems.