Research Proposal Assignment Sample
Introduction
Background and rationale
Corporate governance can be specifically referred to as the system through which companies are controlled and directed for enhancing performances in the long run. The importance of corporate governance is extensive in determining the growth within a stipulated period of time (Musa et al. 2018). The ultimate people that are responsible for governing the companies are the board of directors and leaders. In this regard, Amazon can be taken for an instance to understand the importance of corporate governance in business growth along with enhanced performances over the years. It can be noticed that the board of directors of Amazon are Jeffrey P. Bezos (Executive Chair), Andy Jassy (President and CEO), Keith B. Alexander (Co-CEO, President) and others (Amazon, 2022). With the assistance of these boards of directors, that company is achieving immense success in the competitive market. The corporate governance extensively ensures transparency in the company that in turn results in strong and balanced economic development. Due to the impact of the board of directors, the company has achieved success through enhanced performance over the years.
Figure 1: Net sales revenue of Amazon
(Source: Statista, 2022)
From the above figure, the growth achieved by the company can be significantly noticed through the progressing and systematic revenue escalation from 2004 to 2021 (Statista, 2022). Additionally, in terms of composition, the company is noticed to have three committees for balancing the operation of the company that are audit committee, corporate governance committee and leadership development and compensation committee (Amazon, 2022). With the accumulated help of the whole corporate governance, the company is seen to perform at this escalated level.
Aims and objectives
The aim of this research is to analyse the significance of corporate governance towards the performance enhancement of the companies.
The research objectives are:
- To provide an understanding on the importance of corporate governance for achieving growth in companies
- To analyse the challenges faced by companies in aligning company’s structure with the policies of corporate governance
- To understand the impact of corporate governance in companies
Research question
- What is the importance of corporate governance in achieving growth of the companies?
- How does corporate governance impact the companies in the long run?
- What are the impacts on companies due to corporate governance?
Literature review
Impact of corporate governance on growth of firm
Corporate governance can be explained as the overall system and procedure through which business organisations are managed and controlled. Efficiency of corporate governance within an organisation plays an important role in achieving the growth of the organisation to a great extent. According to Bhagat and Bolton (2019), better corporate governance leads to enhanced performances of the firms. This statement reflects that, maintaining effective corporate governance can contribute to a firm’s growth to a great extent. Corporate governance can facilitate the firm’s growth in various ways. For example, better corporate governance ensures proper allocation of the resources. This improves the productivity of the organisation eventually resulting in enhanced profitability of the organisations. In addition to that, it also improves the image of the company, minimises the fraudulent risks and enhances shareholder’s confidence in companies. Based on the view of Danoshana and Ravivathani (2019), corporate governance exerts remarkable impact on board size and audit committee size, which in turn improve the financial condition of the company significantly. Hence, it can be stated that good corporate governance can positively influence the overall growth of the organisations.
Challenges of implementing corporate governance
Implementing corporate governance and aligning the policies of the governance with the organisational structure can face several challenges. These challenges can be of different types including social and operational challenges. According to Scherer and Voegtlin (2020), the way companies implement corporate governance within the organisations may witness social challenges. Conflicts of interests can also act as a challenge in developing and implementing the appropriate governance policies in the organisations. In addition to that, ethical violations can also occur while implementing the governance policies within an organisation. As per the opinion of Popescu (2019), corporate governance is somewhat related to corporate social responsibility of the business organisations. CSR encourages the integration of business values and different operations of the business along with focusing on different interests of stakeholders of the organisation. For this purpose, proper governance policies need to be designed and implemented. In some cases, organisations fail to develop effective governance policies, which fulfil the demands of all the stakeholders. Apart from that, lack of transparency in governance rules can also appear as a challenge for the authorities. Overall, it can be stated that, there are numerous limitations implementing the governance rules in the organisation and its alignment with the organisational structure and values.
Theoretical underpinning
Agency theory
Agency theory can be specifically referred to as the concept that is used to explain the relationship between the principals and their relative agents (Vargas-Hernández, and Teodoro Cruz, 2018). It can be stated that the principal is certain people that relies extensively on their relative agents for performing certain tasks such as financial decisions, transactions and others that can significantly result in fluctuation of organisational outcomes.
Figure 2: The Agency theory
(Source: Vargas-Hernández, and Teodoro Cruz, 2018)
Corporate governance and its importance can be efficiently understood with the help of agency theory. The theory helps to understand the relationship between agents and principles to a great extent. The theory suggests that the corporations act as agents of their shareholders (Rahmawati and Indonesia, 2018). In the present time, decision making of an organisation is playing a crucial role in the growth of the business organisations and it is the main element of corporate governance. Thus, the decision-making process of corporate governance can be efficiently shaped with the help of mentioned theory. Hence, agency theory can be helpful in focusing the demands and interests of shareholders in order to maintain smooth corporate governance.
Literature gap
The literature review section has presented different aspects of information in regards to corporate governance in the companies. The researcher can face subscription issues on different online sites that can restrict the research from presenting vivid information on the research topic. Additionally, time can also be a significant issue that can create a gap in providing appropriate information in the literature,
Methodology
The researcher would be significantly using interpretivism research philosophy, as it would take the research as close to the truth as possible (Alharahsheh and Pius, 2020). Furthermore, with this research philosophy, the researcher would be able to get a good understanding of corporate governance through obtaining the true feelings of the people associated with it. Hence, interpretivism research philosophy would be extensively efficient for analysing the topic of corporate governance in depth.
The researcher additionally would be using an inductive research approach for conducting this research. By using this research approach, flexibility while researching about the research topic can be obtained (Danaee Fard, 2020). Furthermore, the research would not have to follow any predetermined information as this approach specifically helps in generation of new theory for understanding new or evolved facts.
The researcher would be using descriptive research design, as it would assist the researcher in presenting the research in a descriptive manner. With the assistance of this research design, the research would be presented to the readers in a vivid and descriptive way, providing an in-depth knowledge on the corporate governance and its impact on different organisational performance (Atmowardoyo, 2018).
In terms of data collection methods, the research would be relying on both secondary as well as primary data collection methods for procuring as much information as possible on the research topic (Mkandawire, 2019). For secondary data collection, the researcher would be using Google scholar, Newspaper article, websites and other online resources for obtaining information. However, for primary research, the researcher would be taking interviews of experienced and knowledgeable people working in a UK organisation.
For analysing the acquired data from the data collection methods, the researcher would be using primary qualitative data analysis along with secondary qualitative data analysis, which is also termed secondary thematic analysis (Braun and Clarke, 2021). Through these methods, both the data acquired from primary and secondary sources would be analysed.
Additionally, in terms of sampling, the researcher would be taking interviews of three leaders from a renowned and established UK organisation. Through taking interviews of leaders, the importance and factors about corporate governance can be significantly analysed and understood. Furthermore, the researcher would be using simple random sampling technique for selecting the candidates for interview in order to acquire informative insights on the impacts and importance of corporate governance.
In regards to inclusion criteria, this specific research has included certain journals that would provide insights on the importance and impacts of corporate governance on the companies.
However, in terms of exclusion criteria, the research has excluded the information about the impact of corporate governance on achieving brand value, competitive advantages, customer loyalty and others.
Ethical consideration
Abiding by the guidelines and principles are essential for providing systematic and authentic research work. Hence, for conducting this research, the researcher would be providing authentic information that would eventually make the research valid, accountable and reliable. Furthermore, the researcher would be following the Data Protection Act 2018 for making the research as authentic as possible (GOV, 2022). In addition, the research would also be abiding by the Copyright, Design and Patent Act 1988 (GOV, 2022). The researcher would keep the acquired data in safety, restricting those from getting into wrong hands. For this, the researcher would secure the data with password encryption in the university drive. Additionally, after using the data, the file would be permanently deleted.
References
Alharahsheh, H.H. and Pius, A., (2020). A review of key paradigms: Positivism VS interpretivism. Global Academic Journal of Humanities and Social Sciences, 2(3), pp.39-43.
Amazon, (2022). Investor Relations. [Online]. Available at: <https://ir.aboutamazon.com/corporate-governance/default.aspx> [Accessed 14 May 2022]
Atmowardoyo, H., (2018). Research methods in TEFL studies: Descriptive research, case study, error analysis, and R & D. Journal of Language Teaching and Research, 9(1), pp.197-204.
Bhagat, S. and Bolton, B., (2019). Corporate governance and firm performance: The sequel. Journal of Corporate Finance, 58, pp.142-168.
Braun, V. and Clarke, V., (2021). Thematic analysis. Analysing qualitative data in psychology. London: Sage Publications Ltd, pp.128-47.
Danaee Fard, H., (2020). Inductive approach to building theory: Grounded theory strategy. Commercial Strategies, 3(1), pp.57-70.
Danoshana, S. and Ravivathani, T., (2019). The impact of the corporate governance on firm performance: A study on financial institutions in Sri Lanka. SAARJ Journal on Banking & Insurance Research, 8(1), pp.62-67.
GOV, (2022). Copyright, Designs and Patents Act 1988. [Online]. Available at: <https://www.legislation.gov.uk/ukpga/1988/48/contents> [Accessed 14 May 2022]
GOV, (2022). Data Protection Act 2018. [Online]. Available at: <https://www.legislation.gov.uk/ukpga/2018/12/contents/enacted> [Accessed 14 May 2022]
Mkandawire, S.B., (2019). Selected common methods and tools for data collection in research. Selected Readings in Education, 2, pp.143-153.
Musa, H., Musová, Z. and Debnárová, L., (2018). Importance of Corporate Governance in Socially Responsible Behaviour of Enterprises. Entreprenership–Development Tendencies and Empirical Approach, pp.247-265.
Popescu, C.R.G., (2019). Corporate social responsibility, corporate governance and business performance: Limits and challenges imposed by the implementation of directive 2013/34/EU in Romania. Sustainability, 11(19), p.5146.
Rahmawati, A. and Indonesia, U.M., (2018). How Do Agency Theory, Stewardship Theory and Intellectual Capital as a Solution for Agency Conflict. Journal of Management Research, 10(2).
Scherer, A.G. and Voegtlin, C., (2020). Corporate governance for responsible innovation: Approaches to corporate governance and their implications for sustainable development. Academy of Management Perspectives, 34(2), pp.182-208.
Statista, (2022). Annual net sales revenue of Amazon from 2004 to 2021. [Online]. Available at: <https://www.statista.com/statistics/266282/annual-net-revenue-of-amazoncom/> [Accessed 14 May 2022]
Vargas-Hernández, J.G. and Teodoro Cruz, M.E., (2018). Corporate governance and agency theory: Megacable case. Corporate Governance and Sustainability Review, 1(2), p
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