I= THE CONTROL OF CORPORATION: AN ANALYTICAL STUDY OF MECHANISM EMPLOYED IN NON-FINANCIAL LISTED FIRMS OF PAKISTAN
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Title of Thesis
THE CONTROL OF CORPORATION: AN ANALYTICAL STUDY OF MECHANISM EMPLOYED IN NON-FINANCIAL LISTED FIRMS OF PAKISTAN

Author(s)
Khalid Hussain Shaikh
Institute/University/Department Details
University of Karachi/ Department of Commence
Session
2004
Subject
Business Administration
Number of Pages
311
Keywords (Extracted from title, table of contents and abstract of thesis)
corporation, listed firms, sole proprietorship, partnership, financial firms, non-financial firms, joint stock company, board of directors, stockholder, control of corporation, performance indiactors

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

Download Full Thesis
3780.38 KB
S. No. Chapter Title of the Chapters Page Size (KB)
1 0 Contents 0
397.29 KB
2 1 Introduction 1
209.33 KB
  1.1 Statement Of The Problem 6
  1.2 Organization Of The Present Study 9
  1.3 Limitations Encountered During The Course Of The Present Study 11
3 2 Definitions 12
599.46 KB
  2.1 Corporation Defined 12
  2.2 Control Of Corporation Defined 14
  2.3 Board Of Directors Defined 16
  2.4 Corporate Governance Defined 16
  2.5 Internal Control Mechanisms Defined 17
  2.6 External Control Mechanisms Defined 18
  2.7 Stockholder Defined 20
  2.8 Institutional Stockholder Defined 22
  2.9 Stakeholder Defined 23
  2.10 Interlocking Directorates Defined 24
4 3 Review Of The Literature 24
215.81 KB
  3.1 Board Of Directors And The Behavior Based And Outcome Based Control Of Corporation 27
  3.2 Managerialism 50
  3.3 Intercorporate Alliances 52
5 4 Hypotheses 67
148.08 KB
  4.1 General Trends Regarding The Internal And External Mechanisms Employed In Non Financial Listed Firms Of Pakistan For The Control Of Corporation 67
  4.2 Hypothesized Direct Effect Of Type Of Control And Type Of Performance Indicators On Internal And External Mechanisms Employed In Non-Financial Listed Firms Of Pakistan For The Control Of Corporation 70
  4.3 Hypothesized Interaction Effects Of Network And Direct Control With Type Of Performance Indicator On Internal And External Mechanisms Employed In Non-Financial Listed Firms Of Pakistan For The Control Of Corporation 74
  4.4 Hypothesized Effect Of Network Control And Direct Control On The Performance Of Firm’s Indicators 78
  4.4 Hypothesized Effect Of Industry Performance On Type Of Control And Performance Of Firm’s Indiactors 81
6 5 Global Panorma 82
184.58 KB
  5.1 Corporation 82
  5.2 The Control Of Corporation 86
  5.3 Board Of Directors 88
7 6 The Historical Development Of Corporation: Before Independence Of Pakistan 93
146.83 KB
  6.1 Development Of The Corporation Up To 1850 93
  6.2 After Enforcement Of The Companies Act Of 1850 94
  6.3 Concentration Of The Control Of Corporation 97
8 7 Managing Agency System: The Mechanism Employed For The Control Of Corporation Before And After Independence Of Pakistan 116
97.46 KB
  7.1 Historical Development 116
9 8 Research Methodology 123
158.68 KB
  8.1 Objective Of The Present Study 123
  8.2 Alternative Research Methods Considered 124
  8.3 The Universe 126
  8.4 Sample 126
  8.5 Data Sources 126
  8.6 Measures 126
10 9 Analysis Of Data 135
199.69 KB
11 10 Results 156
685.03 KB
  10.1 Direct Effects Of The Internal And External Mechanisms Employed For The Control Of Corporation 158
  10.2 Direct Effects Of Changes On The Internal And External Mechanisms Employed For The Control Of Corporation 164
  10.3 Direct Effects Of The Internal Mechanisms Employed For The Control Of Corporation 169
  10.4 Direct Effects Of The External Mechanisms Employed For The Control Of Corporation 172
  10.5 Interaction Effects Of The Internal And External Mechanisms Employed For The Control Of Corporation 176
  10.6 Interaction Effects Of Network Control And Performance Indiactors 181
  10.7 Interaction Effects Of Direct Control And Performance Indiactors 187
  10.8 Interaction Effects Of Network Control And Performance Indicators On The Internal And External Mechanisms Employed For The Control Of Corporation 192
  10.9 Interaction Effects Of Direct Control And Performance Indicators On The Internal And External Mechanisms Employed For The Control Of Corporation 198
  10.10 Interaction Effects Of Network Control And Performance Indicators On The Proportions Of The Internal And External Mechanisms Employed For The Control Of Corporation 202
  10.11 Interaction Effects Of Direct Control And Performance Indicators On The Proportions Of Internal And External Mechanisms Employed For The Control Of Corporation 204
  10.12 Interaction Effects Of Network Control And Performance Indicators On The Proportions Of Internal And External Mechanisms Employed For The Control Of Corporation 207
  10.13 Interaction Effects Of Direct Control And Performance Indicators On The Proportions Of Internal And External Mechanisms Employed For The Control Of Corporation 209
  10.14 Overview Of The Results 211
12 11 Conclusions 212
148.96 KB
  11.1 Summary Of Results 212
  11.2 Contributions 215
  11.3 Policy Implications Of Findings 217
  11.4 Future Research 221
13 12 References 224
1032.35 KB
  12.1 Appendix-A 262
  12.2 Appendix-B 307
  12.3 Appendix-C 329