In the digital age, corporate governance and strategic management have become central issues for organisational performance. While corporate governance and strategic management are highly complex topics on their own, combining them in a way that makes sense is an even greater challenge (Hilb, 2017).
During previous research and several pilot studies one of the findings was that, ownership strategy is where corporate governance meets strategic management, and analysing firm cases allowed concluding that the strategic audit is useful for developing systemically ownership strategies, which in turn could be a realistic alternative for complete contracts (Wahl, 2015). Beside the absence of a common goal in form of a knowledge vision (Banerjee, Wahl, & Panigrahi, 2018), shortcomings in organizational culture, mainly reflected as value conflicts, are the main barriers to company success in the digital age (Goran, LaBerge, & Srinivasan, 2017), hindering successful strategy implementation and achievement of the expected performance goals.
Taking into account the opportunities and challenges of digitalization: a high degree of uncertainty mixed with a lot of expectations (Hilb, 2017), we are proposing the following topic: “Organisational Practices in the Digital Age” (Digitaalajastu organisatsioonilised praktikad). The main aim of the proposed project is to improve organisational performance, trough better quality of general management, and making use of the opportunities of digitalization.
Keywords: action research, business angel, corporate governance, digital value creation, mixed methods, procedural analysis, proficiency, start-up, strategic management, values
Topic
Corporate governance is the thought about owners’ will implementation (Wahl, 2012; Wahl, 2017), and it reflects national culture (Licht, Goldschmidt, & Schwartz, 2005; Banerjee, Wahl, Hartšenko, & Ferraro, 2017), therefore the theory of basic values (Schwartz, 1992; Schwartz, et al., 2012), and cultural value orientations (Schwartz, 2008) are crucial. The overarching goal of strategic management is creating and capturing value for core stakeholders (Freeman, 1984). Governance is an inclusive process involving various decision and execution bodies both inside and outside the organisation (stakeholders), and the key dimensions of digitalization are governing digital value creation (who?), enabling digital value creation (why?), amplifying digital value creation (what?), and realizing digital value creation (how?) (Hilb, 2017). However, owners and managers are the people who are primarily tasked with the strategic management and governance.
Research on co-operation between start-up founders focused on global growth by developing digital platform and business angels interested to invest to such ventures allows understanding the changing landscape of corporate governance in the digital society. Co-operation challenges and related learning needs are studied in the knowledge-based ownership strategy context, where owner act as smart capital providers and mentors. Both start-up founders and business angels are principals although their role in venture development is different. Understanding knowledge gaps of each other and learning by doing are important drivers of co-operation between founders and investors.
Organisation’s performance is discussed as a system of functions and business processes are discussed in relationship with organisation’s functions (Gerndorf, 2006). The main content of procedural analysis (Gerndorf, 2006) is the modelling and improvement of the organisational processes (Rüegg-Stürm & Grand, 2015). Improving performance faces many problems. Other related theories to the topic are e.g. contingency theory (Fiedler, 1967), agency theory (Alchian & Demsetz, 1972; Jensen & Meckling, 1976), social cognitive theory (Bandura, 1986), absorptive capacity (Cohen & Levinthal, 1990), knowledge-based theory (Barney, 1991; Nonaka, 1994; Nickerson & Zenger, 2004; Carlile, 2004; Weaven, Grace, Dant, & Brown, 2014).
We know that, it is impossible to manage people, but we can govern them in having a common goal, so we still could meet the business objectives in creating a suitable environment and managing processes through procedures.
Research questions
The central research question is “How to govern people and manage processes proficiently in digital age?”, and four sub-questions:
1) How to improve organisational performance, making use of the opportunities of digitalization?
2) Why and how to construct ownership strategies?
3) How to implement ownership strategies successfully in companies?
Approach
Relying mainly on the philosophy of interpretivism and research approach of abduction, the research strategy will be action research, using mixed methods, and it can be categorized as an explanatory, cross-sectional, multilevel research project. The main aim of the proposed project is to improve organisational performance, making use of the opportunities of digitalization.
Observation by using the portrait ownership questionnaire (POQ) has already started, and also many collected strategic audits (Wheelen, Hunger, Hoffman, & Bamford, 2017) of companies are providing a rich dataset. Procedural analysis (Gerndorf, 2006) is a general methodology, theory and methods for a systematic treatment of processes in all organisations. An outcome of using the method is a system of procedural rules, which is a graphic-verbal model of organisation’s performance. This could be helpful in implementation of ownership strategies.
PhD candidate profile
The project manager aims for diversity in his team, the work will be divided by the defined RQ’s. The candidates must demonstrate a broad knowledge of corporate governance and strategic management, normally by the successful completion of a thesis outline. They should have excellent communication skills, e.g. evaluation through CV and interview.
Expected output
The output will consist of papers and/or manuscripts that will form the contents of doctoral dissertation. The project is designed to lead to a number of publications in high quality journals and conference proceedings.
Cooperation
Depending on the research area, it would be possible to collaborate with other professors at EBS and other universities in Asia, Europe and the United States.
Relevance
Societal relevance
Providing a solid overview of the current situation as well as the trends prevailing in general management, we could improve significantly the quality of general management and improve the performance. Ownership strategies giving a common goal, and they are constructed using a new framework building on an advanced version of the strategic audit. An expected outcome of procedural analysis is a system of procedural rules, which is a graphic-verbal model of organisation’s performance, through which formulated ownership strategies could be implemented successfully in companies. Doing so we could meet the business objectives in creating a suitable environment and managing processes through procedures.
Scientific relevance
The expected results are valuable in several ways. Firstly, adding a new facet to contract theory by proposing the ownership strategy as substitute for complete contracts, in companies with concentrated ownership structure. Secondly, methodologically the research is valuable in the constructed tool for creating knowledge visions and implementing of digital ownership strategies.
Existing publications
Alas, R., & Elenurm, T. (2014). Corporate governance development in a rapidly changing economy: Trends and challenges in Estonia. In S. Boubaker, & D. Nguyen (Eds.), Corporate Governance in Emerging Markets. CSR, Sustainability, Ethics & Governance (pp. 289–309). Berlin: Springer.
Banerjee, S., Wahl, M. F., & Panigrahi, J. K. (2018). Technology, innovation and knowledge transfer: A value chain perspective. International Journal of Mechanical Engineering & Technology (IJMET), 9(1), 1145–1161.
Banerjee, S., Wahl, M. F., Hartšenko, J., & Ferraro, S. (2017). Towards mitigating conflicts of interest: An empirical study of typology of corporate governance systems including values. International Journal of Development and Sustainability, 6(7), 488–499.
Elenurm, T. (2016). Entrepreneurial orientations as a factor of corporate governance priorities. 4th OFEL Conference on Governance, Management and Entrepreneurship (pp. 1–12). Dubrovnik, Croatia: CIRU.
Elenurm, T., & Heil, P. (2015). Education and other competency sources for financially successful entrepreneurship. International Journal of Entrepreneurship and Small Business, 25(3), 314–330.
Elenurm, T., Lassur, S., Tafel-Viia, K., Joller, L., Hansen, K., & Mühlberg, M. (2017). Äriinglite ja ühisrahastuse võimalused alustavale ettevõtjale [Opportunities of business angels and crowdfunding
for a start-up entrepreneur]. Ettevõtlusõppe programm Edu & Tegu [Entrepreneurship education programme Success & Action], Tallinn.
Wahl, M. F. (2012). Ownership typology: Four basic human values & will based ideal types. Research in Economics and Business: Central and Eastern Europe, 4(2), 61–83.
Wahl, M. F., & Prause, G. (2013). Toward understanding resources, competencies, and capabilities: Business model generation approach. Journal of Entrepreneurship and Sustainability Issues, 1(2), 67– 80.
Wahl, M. F. (2015). Strategic audit and ownership strategy. International Journal of Business and Social Research, 5(9), 93–100.
Wahl, M. F. (2015). Strategic factor analysis for industry 4.0. Journal of Security and Sustainability Issues, 5(2), 241–247.
Wahl, M. F. (2015). Strategic audit and ownership strategy. International Journal of Business and Social Research, 5(9), 93–100.
Wahl, M. F. (2017). Toward refining the typology of business ownership. 14th workshop on corporate governance (p. 1−8). Brussels: EIASM.
Supervisor: Associate Professor Mike Franz Wahl