Research in corporate governance and labour law has been characterised by a disjuncture in the way that scholars in each field are addressing organisational questions related to the business enterprise. While labour has eventually begun to shift perspectives from aspirations to direct employee involvement in firm management, as has been the case in Germany, to a combination of ‘exit’ and ‘voice’ strategies involving pension fund management and securities litigation, it remains to be seen whether this new stream will unfold as a viable challenge to an otherwise exclusionary shareholder value paradigm. At the same time, recent suggestions made by Vice Chancellor Strine of the Delaware Chancery Court to dare think about potentially shared commitments between management and labour underline the viability of attempts at moving the corporate governance debate beyond the confines of corporate law proper.
This paper takes the questionable divide between management and labour within the framework of a limiting corporate governance concept as a starting point to explore the institutional dynamics of the corporation, thereby building on the theory of the innovative enterprise as developed by management theorists Mary O'Sullivan and William Lazonick. Largely due to the sustained distance between corporate and labour law scholars, neither group has effectively addressed their common blind spot: a better understanding of the business enterprise itself. In the midst of an unceasing flow of affirmations of the finance paradigm of the corporation, on the one hand, and ‘voice’ strategies by labour, on the other, it seems to fall to management theorists to draw lessons from the continuing coexistence of different forms of market organisation, in which companies appear to thrive. Exploring the conundrum of ‘risky’ business decisions within the firm, management theorists have been arguing for the need to adopt a more sophisticated organisational perspective on companies operating on locally, regionally and transnationally shaped, and often highly volatile, market segments. Research by comparative political economists has revealed a high degree of connectivity between corporate governance and economic performance without, however, arriving at such favourable results only for shareholder value regimes. Such findings support the view that corporate governance regimes are embedded in differently shaped regulatory frameworks, characterised by distinct institutions, both formal and informal, and enforcement processes. As a result of these findings, arguments to disassociate issues of corporate governance from those of the firm's (social) responsibility (CSR) have been losing ground. Instead, CSR can be taken to be an essential part of understanding a particular business enterprise. It is the merging of a comparative political economy perspective on the corporation with one on the organisational features, structures and processes of the corporation that can help us better understand the distribution of power and knowledge within the ‘learning firm’.