The German system of corporate governance: Characteristics and changes

As Germany enters the 21st century, the traditional system of corporate governance, often referred to as “Deutschland AG”, has come under intense pressure to change. This report seeks to analyze the recent dynamics of the system to assess the extent to which they have already led to an erosion of the traditional characteristics. Many of the distinct features of the German system have shown strong resilience despite the pressure for change, while other features seem to have unraveled quickly. The areas in which these changes appeared to have emerged most profoundly and quickly are in the role of banks and in the role of financial markets. Germany is often cited as a classical case of “non-shareholder value orientation”, whose production-oriented, long-term, risk adverse and consensus-driven values have often been contrasted with the “Anglo-Saxon” approach. The forces currently driving the German political economy towards a shareholder-value orientation can be summarized as follows: State measures to deregulate financial markets; pressure of managers of investments funds and pension funds, in particular from the USA; responses to product-market changes and the internationalization of production. These factors have had an input on all three pillars of the traditional German system: 1. The dominant role of the banks in a complex system of cross-shareholding and in company financing; 2. the system of industrial co-determination; 3. the production- centered, company-centered management system. But the developments are still recent and ambiguous. The question is whether these forces will initiate major and permanent change in the operating principles of the German system or whether they will be superseded by the system’s traditional logic. Our report explores these issues in a preliminary way at a point of time when it is not possible to provide a definite answer to what these changes portend. -- Mit dem Übergang in das 21. Jahrhundert gerät das traditionelle deutsche System der Corporate Governance – oft als „Deutschland AG“ bezeichnet – unter starken Veränderungsdruck. Die vorliegende Untersuchung beschreibt die gegenwärtigen Veränderungstendenzen und analysiert, inwieweit diese bereits zu einer Erosion des traditionellen Systems geführt haben. Einige der Besonderheiten des deutschen Systems haben sich – so wird in der Studie gezeigt – als außerordentlich veränderungsresistent erwiesen, bei anderen Merkmalen zeigt sich ein rascher Auflösungsprozess. Die stärksten Veränderungen sind hinsichtlich der Rolle der Banken sowie der Finanzmärkte zu verzeichnen. Deutschland wird oft als klassischer Fall einer Nicht-Shareholder-Value-Orientierung angeführt, das mit seiner Langfristorientierung und Risikoaversion, seiner Produktionszentriertheit und Konsensorientierung ein Gegenmodell zum angelsächsischen Ansatz darstellt. Die wichtigsten Triebkräfte für Veränderungen des deutschen Modells hin zu einer Shareholder-Value-Orientierung sind zum einen staatliche Maßnahmen zur Deregulierung der Finanzmärkte, Druck von Seiten internationaler Investment- und Pensionsfonds, insbesondere aus den USA, sowie Reaktionen auf die Entwicklungen auf den Produktmärkten und die Globalisierung. Auswirkungen dieses Veränderungsdrucks lassen sich für jede der drei tragenden Säulen des traditionellen deutschen Systems feststellen: 1. die Rolle der Banken im Rahmen eines komplexen Systems der Eigentumsverflechtungen und Unternehmensfinanzierung; 2. das System der Mitbestimmung und 3. die Produktions- und Unternehmenszentrierung des leitenden Managements. Allerdings handelt es sich um recht neue und in ihrer Wirkung kaum abschätzbare Entwicklungen. Die Frage, inwieweit sie zu einem grundlegenden Wandel des deutschen Systems der Corporate Governance führen, muss daher zum gegenwärtigen Zeitpunkt offen bleiben.

Marketing Cooperatives' Re-engineering: Influences among Organizational Attributes, Strategic Attributes & Performance

ABSTRACT In this paper we expand the agribusiness co-op literature by studying the re-engineering process of marketing cooperatives (co-ops). More specifically we discuss and empirically examine organizational innovations adopted by marketing co-ops in Greece. We hypothesize three types of relationships: a) the influence of organizational (i.e., collective ownership, control and cost/benefit allocation) and strategic (i.e., market and brand orientation) attributes on organizational performance; b) the influence of organizational attributes on market orientation; and c) influences among strategic attributes. Data for this study were collected from a largescale survey with CEOs of marketing co-op in Greece. The results show that strategic attributes have a much greater influence on organizational performance than organizational attributes have, as only a few among the examined elements of re-engineered attributes have a (marginal) positive influence on performance. This result raises the question whether the influence of the re-engineered structures on performance has been over-emphasized in the co-op literature. Moreover, the results demonstrate positive influences among the strategic attributes of co-ops, contrary to the non-significant results of organizational attributes on market orientation. This may imply that organizational attributes do not seem to act as drivers or barriers to the adoption of strategic attributes, and, hence, reinforces the conclusion that emphasis in co-op theory and practice should also be also placed on the strategies and tactics that co-ops should adopt and implement in order to capture market benefits. Keywords: marketing cooperatives, attributes, organizational, strategic, performance, Greec

Financial systems, innovation and economic performance

There is growing evidence of international divergence in the performance of newindustries. While the United States is at the forefront of the recent revolution ininformation technologies, European economists and policy makers are concerned thatEurope is falling behind with negative implications for long-term economicperformance. This paper investigates the role of financial systems as a crucialdeterminant of apparent differences in national abilities to promote innovativeactivities in specific sectors. Firstly, a short overview of the relevant finance andinnovation literature is provided, and a synthetic view of the finance-innovation linkis sketched. It is argued that national financial systems have an impact on thestructure of growth through their differing abilities to promote innovation in sector-specifictechnology regimes. Secondly, I apply a simple econometric model to a dataset consisting of 17 OECD countries and 20 manufacturing industries to identifyempirical patterns. The evidence suggests that sectors characterized by hightechnological opportunity and a focus on product innovation perform relatively betterin financial systems with large stock markets, competitive banking sectors and goodaccounting standards. In contrast, the performance of sectors geared towardsinnovation in processes benefits from a more bank-oriented financial system andconcentrated ownership structures.economics of technology ;

Labor and Employment Policies in the US Election 2008 and the Upcoming Legislative Agenda

Published October 2008 in Korean: "Mi taeson hubodul-ui nodong chongch’aek mit’ koyong chongch’aek pigyo," Kukche nodong burip, International Labor Review; Han’guk nodong Yonguwon, The Korea Labor Institute (KLI) Vol.6, No 11, 2008 pp.41-53. Available in Korean at: http://www.kli.re.kr/Revised January 2009The focus of the 2008 Presidential Election in the United States turned from foreign policy to domestic economic policy in response to the global financial crisis and its mounting effects on the US financial, housing, and labor markets. In recent elections, labor policy has not explicitly been at the forefront of campaign issues or political debate. Indeed, parsing out the policy positions of the 2008 presidential candidates, Senator Barack Obama (Democrat, Illinois) and Senator John McCain (Republican, Arizona), required delving into an array of issue areas and proposed legislation that often fell under headings loosely related to what is generally understood as "labor policy" by academics and labor and industrial relations professionals. Neither Senator Obama nor Senator McCain listed labor policy or employment policy as major issue areas on their candidate websites. However, Senator Obama and Senator McCain held opposing positions on specific employment and labor policies which reflected both their individual policy orientations toward labor and employment policy and the historic oppositional positions of the Democratic and Republican parties in the United States. The opposing positions of the US presidential candidates on labor policy reflected different perspectives on the role of government in economic security and the regulation of the employment relationship. The Democratic Party has historically supported a pro-worker agenda including legal and regulatory support for labor organizing and collective bargaining, income security through job protection, minimum wages, workplace-based health and retirement benefits for workers, and the regulation and/or prohibition of discriminatory practices in hiring, promotion, compensation, and firing (particularly related to race and gender and more recently inclusive of sexual orientation and immigration status). In contrast, the Republican Party has eschewed a regulatory approach to the labor market and privileged a "laissez-faire" approach to the employment relationship. In general, the Republican Party has opposed labor organizing and collective bargaining, arguing that they are coercive, and instead emphasized the right of each worker to agree on an individual employment contract with his employer. Similarly, the Republican Party has viewed workplace benefits (including health insurance and retirement plans) through a lens of employer flexibility, individual choice, and a preference for privatization. The Republican Party argues that regulatory requirements to provide workers with health and retirement benefits force US-based firms into an uncompetitive position in a global economy. And Clark, School of Public Policy 2 Georgia Institute of Technology finally, the Republican Party views questions of employment discrimination narrowly and proposes that policies are best adjudicated through private mediation. The labor and employment policies of the 2008 presidential candidates reflected the opposing ideological orientation of their respective parties. The specific policy positions of the candidates were found under a number of functional policy headings rather than as a comprehensive labor policy position. For example, the array of policies which support the participation of women in the labor force (including subsidized child-care, job protections and income support for primary care givers who take family leave, prohibitions against workplace discrimination, and flexible work arrangements) fell under the heading of "Work/Family Balance" in the Obama campaign’s policy materials. In the McCain campaign, the similar issue area, support and protections for women and families in the labor force, fell under the dual headings of "Workplace Flexibility in a Changing Economy" and "Workplace Flexibility and Choice." Neither candidate explicitly categorized these policies as "labor policies." This article describes the labor and employment debates likely to emerge in 2009 and during the Obama administration as well as the positions of the Republican and Democratic presidential candidates on policy issues related to labor policy, employment regulation, and economic security for workers stated during the 2008 campaign. There are two major pieces of legislation, the extension of the Family and Medical Leave Act of 1993 (FMLA) and the pending Employee Free Choice Act (EFCA) which directly address the areas at the heart of national labor policy: 1) terms and conditions or employment and, 2) workplace wages and benefits. In addition, there are several secondary pieces of legislation pending. These acts are primarily constructed as a response to recent anti-labor judicial decisions during the Bush Administration. Secondly, this article outlines policy initiatives beyond the pending legislation which have been significantly affected by the recent global financial crisis: retirement security, pensions, and social security. And finally, this article discusses pending legislation regarding the regulation of workplace discrimination

Fisheries marketing systems and consumer preferences in Puttalam District Sri-Lanka

The aim of this study was to understand the current and historic market situation for inland fish and it’s substitutes in order to identify which of the various production opportunities presented by the seasonal tank resource might have greatest relevance for marginal communities in the Dry-zone. Regional and sub-regional market networks for fish and meat products were investigated, ranking and scoring exercises used to characterise consumer demand in rain-fed areas of North West Province and secondary data sources were used to assess historic patterns of demand and supply [PDF contains 57 pages

Incentive Contracting versus Ownership Reforms: Evidence from China's Township and Village Enterprises

We use a unique data set to study the implications of introducing managerial incentives and, in addition to incentives, better defined ownership for a firm's financial performance. The data set traces the ten-year history of 80 Chinese rural enterprises, known as township and village enterprises. During this period, these originally (mostly) community owned, local government controlled socialist collective firms were first allowed to introduce managerial incentive contracts and then to change to ownership forms of more clearly defined income and control rights. The study finds that introducing managerial incentives had a positive but statistically insignificant effect on these firms' performance measured by accounting return on assets or return on equity. It also finds that the performance is significantly better under ownership forms of better-defined rights than under community ownership even when the latter is supplemented with managerial incentive contracts. The findings shed lights on some important theoretical and policy issues.http://deepblue.lib.umich.edu/bitstream/2027.42/39749/3/wp365.pd

Agriculture in Transformation: The Restructuring of Farm Enter in Central and Eastern European Countries during the Transition Process

Ten years of transition processes in the former communist countries of Central and Eastern Europe (CEEC) have changed the ownership structure as well as the structures and legal forms of enterprises in agriculture considerably. The farm structures in Eastern Europe developed under the influence of various collectivisation models. These influenced the course of the transformation process and therefore the development of new entrepreneurial and farm structures to a great extent. In addition also the effects of other political, social and economic factors with different weights can be noticed in the individual countries. Considering labour organisation and relation to markets, four different types of farm enterprises have evolved in the Central European and East European states during the transformation process: (a) Family farms for a mere self-sufficiency (Subsistence farms) (b) Family farms with a predominant orientation towards the market (c) Market-oriented joined family farms (d) Market-oriented farms with hired labour In the future farms and agricultural enterprises of all different types can have good prospects and therefore also the different sizes connected with them. For this reason the same should be valid for all types of farms and in the long term competition should decide, which types are going to compete. The preference or discrimination of a certain type by the agrarian policy needs to be avoided. The state also needs to develop the infrastructure in rural areas, to improve the prospects of farms that are deprived in this respect.Farm Management,

Corporate Social Responsibility and Financial Performance: A Cross-Cultural Analysis

Based on the geographic limitations of previous meta-analysis made about Corporate Social Responsibility (CSR) and Financial Performance (FP) and on the evidence found in previous work on the country's influence in this relationship, the aim of this paper is to analyze the relationship between these two variables studying the possible moderating effect that the country variable may have on it. By the use of the cultural dimensions of GLOBE (2004), we classify the countries, and test the hypothesis through the statistical technique of meta-analysis. The results show that the country where the companies are home-based moderates the relationship between CSR and FP. In particular from the results, we can conclude that while in Australia, Canada, USA and the United Kingdom the relationship is stronger and larger, in some countries, such as Japan, there is no relationship