Are corporate governance system dichotomous (Anglo-American v Essay

Are corporate governance system dichotomous (Anglo-American v. German-) Is the Russian Federation consistent with any of these - Essay Example The parts may be essentially same in their basic purpose however, their orientation may be different and therefore the overall implications can also be different too. The dichotomy hypothesis therefore suggests that the world views may be divided into two different parts which are non-overlapping and mutually exhaustive in nature. These characteristics of the dichotomy suggest the views on the corporate governance could also be dichotomous in nature. Based on this, the corporate governance models are divided into two models of Anglo- American and Eurasian models. This paper will aim to study and explore the dichotomous nature of corporate governance and whether Russia is consistent with any of the models defined under dichotomous nature. Corporate Governance Before discussing dichotomous nature of the corporate governance systems, it is important to discuss corporate governance as a subject and its implications for the organizations. Corporate governance is considered as a multi-face ted and interesting subject considering the fact that it deals with the diversified range of issues faced by the organizations. Corporate governance as a discipline suggests that it is a set of processes, policies, laws and procedures which govern the overall behavior of an organization within a given society. ... Companies like WorldCom and Enron continued to defraud different stakeholders by engaging themselves into activities which may not be considered entirely ethical Due to this, legislations such as Sarbanes Oxley were enacted in order to ensure that organizations are discouraged from engaging themselves into unethical behavior. The current financial crisis was also one of the key reasons for the renewed emphasis on the corporate governance as a process. The large scale failure of financial institutions outlined that the corporate governance may be a process which could have ensured that organizations engage into the activities which are favorable for all the stakeholders without actually jeopardizing the overall interests of all stakeholder groups. Dichotomous World Hypothesis Corporate governance as a model is practiced under two different aspects of the same concept. The dichotomous world hypothesis outlines that there are two different models of corporate governance systems. One mod el is based on the American shareholders model whereas another model is based on the German model of stakeholders. This hypothesis therefore identifies the corporate governance as a phenomenon which is perceived under two different schools of thoughts or opinions on the nature of the corporate governance systems. Dichotomy as a concept outlines something which can be divided into two halves however, each half remain mutually exclusive from other. What is critical about this concept is the fact that the halves remain independent however, they form the part of the whole and such re-enforce ach other. (Peng,) The groups of stakeholders which are often associated with an organization include shareholders, government, executives, employees, general public,