National Governance Bundles Perspective: Understanding the Diversity of Corporate Governance Practices at the Firm and Country Levels

• Author: Igor Filatotchev,Christina Ahmadjian,Eduardo Schiehll
• DOI: http://doi.org/10.1111/corg.12067
• Date: 01 May 2014
• Published date: 01 May 2014

Editorial

National Governance Bundles Perspective:

Understanding the Diversity of Corporate

Governance Practices at the Firm and

Country Levels

Eduardo Schiehll, Christina Ahmadjian, and Igor Filatotchev

INTRODUCTION

Corporate Governance: An International Review was

founded in 1992, and its mission is to develop a rigor-

ous and relevant global theory of comparative corporate

governance. Over the past 22 years, this journal has grown in

reach and reputation. To commemorate its 20thAnniversary

and by the initiative of its former editor William Q. Judge,

the journal held a special conference in Cambridge, UK, in

September 2012. The co-sponsors of this conference were the

Judge Business School (University of Cambridge) and the

publisher of CGIR, Wiley Publications.

The theme of the 20th CGIR Anniversary Conference was

national governance bundles (NGB) and this special issue

publishes the best articles presented at the conference, as

well as commentaries by two distinguished keynote speak-

ers of the conference. In all, 137 abstracts were submitted to

the conference. Of these, 70 were accepted for presentation

at the two-day conference in Cambridge. Of the conference

presenters, 24 were invited to submit their articles to a blind

review for publication in CGIR. This issue features the f‌ive

articles accepted for this special issue. In line with the jour-

nal’s mission, the aim of the conference and this special issue

is to advance our understanding of the interplay between

f‌irm- and national-level governance mechanisms, and its

effects on f‌irm outcomes. We named it “National Gover-

nance Bundles (NGB) Perspective” as it combines insights

from the literature on f‌irm-level governance bundles with

insights from the national governance systems literature.

DEFINING NATIONAL

GOVERNANCE BUNDLES

Although the idea of complementarity and substitutability

among control mechanisms can be traced back to the works

of Milgrom and Roberts (1990, 1995), the concept of “bundle

of governance mechanisms” was introduced in the gover-

nance literature by Rediker and Seth (1995). Complementar-

ity implies synergistic effects among activities and provides

the basis for understanding how various elements of the

organizational architecture (e.g., strategy, structure, pro-

cesses, information, and control systems) are interrelated

and interdependent (Milgrom & Roberts, 1990). Accord-

ingly, two governance mechanisms are complementary

when the adoption of one increases the marginal returns of

the other and vice versa. In contrast, the substitutability

effect refers to the direct functional replacement of one

mechanism by the other, while the overall functionality of

the system remains unaffected (Aguilera, Desender, &

Kabbach de Castro, 2011).

The complementarity and substitution perspectives

among governance mechanisms has provided the theoreti-

cal basis for the conf‌igurational approach in comparative

governance research (Aguilera, Filatotchev, Gospel, &

Jackson, 2008; Aoki & Jackson, 2008). This approach has

motivated most of the previous studies about f‌irm-level gov-

ernance bundles, which provide relevant insights about why

different conf‌igurations of governancepractices at f‌irm level

may lead to similar f‌irm outcomes (García-Castro, Aguilera,

& Ariño, 2013; Hoskisson, Castleton, & Withers, 2009;

Rediker & Seth, 1995; Ward, Brown, & Rodriguez, 2009).

These studies, however, have mainly examined f‌irm-level

complementarities and substitutions among internal corpo-

rate governance mechanisms (f‌irm-level governance

bundles) with limited consideration of the national context.

Filatotchev, Jackson, and Nakajima (2013) outline an

emergent stream of research which argues that understand-

ing how corporate governance differs around the world

requires a more rich and comparativeview of institutions. In

particular, they argue thatthe nature of governance conf‌licts,

179

Corporate Governance: An International Review, 2014, 22(3): 179–184

© 2014 John Wiley & Sons Ltd

doi:10.1111/corg.12067