Pakistan Research Repository

THE CONTROL OF CORPORATION: AN ANALYTICAL STUDY OF MECHANISM EMPLOYED IN NON-FINANCIAL LISTED FIRMS OF PAKISTAN

Shaikh, Khalid Hussain (2004) THE CONTROL OF CORPORATION: AN ANALYTICAL STUDY OF MECHANISM EMPLOYED IN NON-FINANCIAL LISTED FIRMS OF PAKISTAN. PhD thesis, University of Karachi, Karachi.

[img]HTML
31Kb

Abstract

In this contemporary era of globalization, no country can be sure of its progress and prosperity without the development of its business activities. Similarly, competitive survival, growth and success of a business organization depend upon the effectiveness of its internal and external mechanisms that employed for the control and governance with comparison to its rivals. Insensitivity to the control of business activities and good governance activities leads to dependencies of all kinds According to the classification, business organizations divided into: (1) sole Proprietorship (2) Partnership and (3) Corporation (Joint Stock Company). The Corporation can be either (1) Private of (II) Public. Publicly owned corporations enlisted on the Stock Exchanges. The listed corporations can be (a) Financial or (b) Non-Financial firms This dissertation relates to the third type of business organization i.e. corporation. The specific focus of the present study was on the non-financial listed firms, which quoted on the Karachi Stock Exchange, Karachi Pakistan A large number of studies analyzed the control of corporation and its governance. However, the focus of these studies restricted and surrounded the developed economies like, USA, UK, Canada, Australia, Japan, Germany, France etc. Whereas, the present study is the first effort of its kind in the academic history of Pakistan, to break the ground financial listed corporations of the transitional economies, like Pakistan To understand the mechanisms employed for the control of non-financial listed corporations, the corporate literature is heavily dominated and generally accepted three theoretical perspectives: (I) Interoperate Alliances. (II) Managerialism; and (III) Agency Theory. During current study, these theoretical approaches applied to draw the results of hypotheses, which developed for the present study The hypotheses emerged from theories of inter corporate alliances were upheld with regard to the levels of internal mechanisms, changes in external mechanisms, as well as the interactive effects of the network control and the stockholder rate of return on the levels of internal mechanisms and external mechanisms. Further, the hypotheses of inter corporate alliances approach were also supported the interaction of network control and the accounting rate of return on the level of external mechanisms, the interaction of network control and corporate misconduct on the level of internal mechanisms and the interaction of network control and firm size on the levels of internal and external mechanisms The hypotheses emerged from the managerialist perspective received some support with endorsement obtained for the direct effects of managerial (direct) control on the accounting performance of the firm, on the level of internal and external mechanisms and on changes in internal and external mechanisms. The interactive effects of direct control and return on equity on the internal and external mechanisms and the interactive effects of direct control and research & development expenditures on the level of internal and external mechanisms and on changes in internal and external mechanisms. Further, the general lack of significance of coefficient involving the interaction of direct control and stockholder rate of return, support of these coefficients in a direction opposite to that predicted The results further points to the unequivocal importance of market evaluations to thus extent that notions suggested by agency theory with respect to the dominance of market concerns. Hence, for example, the anomalous finding that as the degree of managerial control increased, firm size and the levels of and changes in CEO’s compensations were negatively associated. It may interpret that managers’ preferences (in this case for stable and controllable criteria of evaluation) not always sustained at the expense of owners, even in the firms having extremely powerful managers Specifically, the results of the analyses cmploying tests of the direct and interactive effects of type of control indicated strong support for the importance of the criterion of market performance of the firm in the internal and external mechanisms employed for the control in non-financial listed firms of Pakistan. In this regard, the propositions of inter corporate alliances approach received consistent and robust support from the data. However, both managerialism and agency theory of the control of corporation had significant direct and interactive effects, though these were somewhat less consistent and robust. It suggests that a full understanding of the nature and consequences of the control of corporation connot discount the influence of the network of inter corporate alliances or the strategic position of the executives in determining the corporate policy

Item Type:Thesis (PhD)
Uncontrolled Keywords:corporation, listed firms, sole proprietorship, partnership, financial firms, non-financial firms, joint stock company, board of directors, stockholder, control of corporation, performance indiactors
Subjects:Business Administration & Management (d)
ID Code:1203
Deposited By:Mr. Muhammad Asif
Deposited On:04 Jan 2007
Last Modified:04 Oct 2007 21:05

Repository Staff Only: item control page