Corporate governance and stakeholder conflict

The stakeholder management literature is dominated by the 'shareholder value ' and 'inclusive stakeholder' views of the corporation. Each views the governance problem in terms of inter-functional conflicts between stakeholder groups, such as between investors and managers or managers and employees, and rests on the assumption of an idealized corporate structure characterized by the separation of ownership from management. Our review of corporate governance and stakeholder conflict shows that such functional-based characterization is too simplistic and fail s to account for important intra-functional conflict. Through a comparative revi ew that con siders managerial , stakeholder and family systems of governance, we demonstrate that, while the modality of conflict varies by system, substantial intrafunctional conflict is endemic to each. We integrate the findings of the agen cy and comparative stakeholder theories of corporate governance to offer an authoritybased framework with three different governance structures that offers complementary insights into stakeholder conflicts. Thus, our study highlights the important, but often neglected, intra-stakeholder type of conflict in various organizations and provides a basis for understanding their various manifestations and con sequences under the different systems of governance. M. Carn ey John Molson School of Business, Concordia University , 1455 de Maisonneuve Blvd. West, Montreal. QC, Canada email: [email protected] a.ca E. Gedajlovic School of Busine ss, Simon Fraser University, Vancouver , BC, Canada e-mail : erg @sfu.ca s. Sur ([8] ) Sch ool of Busines s, Dalh ousie University. 6100 University Avenue. Halifa x, NS, Canada e-mail: suj [email protected] Published online: 04 February 20I0 ~ Springer