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Annotated Bibliography
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Introduction Organizational and Governance Structures help in identifying responsibilities and rights of directors, managers and other stakeholders and the rul.es and procedures for decision making. The environmental forces influence the decisions made by the managers as a business in affected by both internal and external forces which should be put into consideration when making decisions. firms face different types of risks ranging from financial, political, environmental and should be put into consideration when making any decision. Ignoring some of the risks may lead to failure in the decisions made. Understanding an organisations business practices is important as they represent essential systems and behaviours which help in driving an organisations performance. For example, an organisation that wants to develop a high-performance capability it should understand what constitutes a best practice. All organisations have four main functions which are operations, finance, human resources and marketing. These functions make it easy for managers to make decisions as each function has its specific purpose. Li, Y., & Zhang, X. T. (2018). How Does Firm Life Cycle Affect Board Structure? Evidence from China's Listed Privately Owned Enterprises. Management & Organization Review , 14(2), 305-341. doi:10.1017/mor.2017.55 The main contextual factor discussed in the journal is governance structures. The researchers used data from China’s listed privately owned enterprises (POEs) to specifically explore the effects of firm’s life cycle on board structure by focusing on dynamics of board functions. The aspects for governance discussed in the journals were board chair-CEO duality, board independence, and board size. The board of directors monitor the managerial teams and deal with agency conflicts on behalf of the shareholders. The board structure determines the effectiveness of the board. independent directors are effective in monitoring the managers because their interests are different. The findings of the research show that the board size declined over the firm’s life’s cycle, the board chair duality remained almost static and showed a trend of separation for board chair -CEO duality. the results indicate that board size and independence are significantly and positively related with adding more directors across the firm life cycle. the results do not show much deviation because each
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individual firm have different board structures. The firm’s life cycle was measured by sales growth, capital expenditure rate, retained earnings and firms age. The findings are important to managers as they help them understand that the board characteristics such as independence and board size are associated with agency relationships and firm’s resources. good relationships and proper utilization of resources leads to improved organizational performance and increased competitiveness. The findings suggest that an organisation should adjust its boards structure to a proper size to improve its competition.
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