Understanding the role of Ownership Structure in the Board Strategic Decision-Making Process: A Multiple Case Study of State-owned, Pseudo-Private and Private Banks in Iran

Objective:This study aims to explain the role of ownership structure in the board strategic decision-making process in the Iranian institutional context as a developing country. The Agency Theory does not direct this research as the dominant theory in the corporate governance field; instead, this st...

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Autores principales:	Mohammad Sadegh Hashemi, Amin Moeinian, Abbas Nargesian
Formato:	article
Lenguaje:	FA
Publicado:	University of Tehran 2020
Materias:	ownership structure corporate governance concentrated ownership mixed ownership strategic decision-making process Political institutions and public administration (General) JF20-2112
Acceso en línea:	https://doaj.org/article/cbfb343355dc486eac862b11a5636d05
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spelling	oai:doaj.org-article:cbfb343355dc486eac862b11a5636d052021-11-14T05:56:24ZUnderstanding the role of Ownership Structure in the Board Strategic Decision-Making Process: A Multiple Case Study of State-owned, Pseudo-Private and Private Banks in Iran2008-58772423-534210.22059/jipa.2020.306096.2776https://doaj.org/article/cbfb343355dc486eac862b11a5636d052020-09-01T00:00:00Zhttps://jipa.ut.ac.ir/article_81613_db0cbde66f6ab555b88bc90274bc8994.pdfhttps://doaj.org/toc/2008-5877https://doaj.org/toc/2423-5342Objective:This study aims to explain the role of ownership structure in the board strategic decision-making process in the Iranian institutional context as a developing country. The Agency Theory does not direct this research as the dominant theory in the corporate governance field; instead, this study is guided through the behavioral approach. Methods: The strategy of this research is a multiple case study with an abductive theory-building approach. By examining the ownership structure of Iranian banks, four banks were selected. Thirty-four semi-structured interviews are conducted with the CEOs, board members, CEO deputies, and officers relevant to strategy and corporate governance. Data analysis and theorizing were followed by systematic coding of interviews through eight steps, including within-case analysis, cross-case analysis, initial hypothesis building, and enfolding the literature. As a result, six propositions are suggested and conceptualized. Results: The results reveal that ownership concentration harms the balance of power, and thus the effectiveness of the decision-making process. At the same time, mixed ownership hurts strategic decision-making with a negative effect on the balance of trust and emotional climate and balance of the cognitive conflict. Regulatory bodies can moderate the negative effect of ownership concentration on the balance of power. Conclusion: Contrary to existing literature, results show that both "ownership concentration" and "mixed ownership" have negative impacts on the "effectiveness of strategic decision-making". Three primary processes, the balances of "power", "trust and emotional climate" and "cognitive conflict", appear to explain the findings. Regulatory bodies, as critical institutional forces, moderate these adverse effects. We explain our conflicting findings with the differences between institutional contexts. Due to the importance of banking in the Iranian economy and considering the moderating role of supervisory agencies on the mentioned negative impacts, improving regulatory institutions and strengthening supervisory mechanisms to limit major shareholders' interference is suggested.Mohammad Sadegh HashemiAmin MoeinianAbbas NargesianUniversity of Tehranarticleownership structurecorporate governanceconcentrated ownershipmixed ownershipstrategic decision-making processPolitical institutions and public administration (General)JF20-2112FAمدیریت دولتی, Vol 12, Iss 3, Pp 550-583 (2020)
institution	DOAJ
collection	DOAJ
language	FA
topic	ownership structure corporate governance concentrated ownership mixed ownership strategic decision-making process Political institutions and public administration (General) JF20-2112
spellingShingle	ownership structure corporate governance concentrated ownership mixed ownership strategic decision-making process Political institutions and public administration (General) JF20-2112 Mohammad Sadegh Hashemi Amin Moeinian Abbas Nargesian Understanding the role of Ownership Structure in the Board Strategic Decision-Making Process: A Multiple Case Study of State-owned, Pseudo-Private and Private Banks in Iran
description	Objective:This study aims to explain the role of ownership structure in the board strategic decision-making process in the Iranian institutional context as a developing country. The Agency Theory does not direct this research as the dominant theory in the corporate governance field; instead, this study is guided through the behavioral approach. Methods: The strategy of this research is a multiple case study with an abductive theory-building approach. By examining the ownership structure of Iranian banks, four banks were selected. Thirty-four semi-structured interviews are conducted with the CEOs, board members, CEO deputies, and officers relevant to strategy and corporate governance. Data analysis and theorizing were followed by systematic coding of interviews through eight steps, including within-case analysis, cross-case analysis, initial hypothesis building, and enfolding the literature. As a result, six propositions are suggested and conceptualized. Results: The results reveal that ownership concentration harms the balance of power, and thus the effectiveness of the decision-making process. At the same time, mixed ownership hurts strategic decision-making with a negative effect on the balance of trust and emotional climate and balance of the cognitive conflict. Regulatory bodies can moderate the negative effect of ownership concentration on the balance of power. Conclusion: Contrary to existing literature, results show that both "ownership concentration" and "mixed ownership" have negative impacts on the "effectiveness of strategic decision-making". Three primary processes, the balances of "power", "trust and emotional climate" and "cognitive conflict", appear to explain the findings. Regulatory bodies, as critical institutional forces, moderate these adverse effects. We explain our conflicting findings with the differences between institutional contexts. Due to the importance of banking in the Iranian economy and considering the moderating role of supervisory agencies on the mentioned negative impacts, improving regulatory institutions and strengthening supervisory mechanisms to limit major shareholders' interference is suggested.
format	article
author	Mohammad Sadegh Hashemi Amin Moeinian Abbas Nargesian
author_facet	Mohammad Sadegh Hashemi Amin Moeinian Abbas Nargesian
author_sort	Mohammad Sadegh Hashemi
title	Understanding the role of Ownership Structure in the Board Strategic Decision-Making Process: A Multiple Case Study of State-owned, Pseudo-Private and Private Banks in Iran
title_short	Understanding the role of Ownership Structure in the Board Strategic Decision-Making Process: A Multiple Case Study of State-owned, Pseudo-Private and Private Banks in Iran
title_full	Understanding the role of Ownership Structure in the Board Strategic Decision-Making Process: A Multiple Case Study of State-owned, Pseudo-Private and Private Banks in Iran
title_fullStr	Understanding the role of Ownership Structure in the Board Strategic Decision-Making Process: A Multiple Case Study of State-owned, Pseudo-Private and Private Banks in Iran
title_full_unstemmed	Understanding the role of Ownership Structure in the Board Strategic Decision-Making Process: A Multiple Case Study of State-owned, Pseudo-Private and Private Banks in Iran
title_sort	understanding the role of ownership structure in the board strategic decision-making process: a multiple case study of state-owned, pseudo-private and private banks in iran
publisher	University of Tehran
publishDate	2020
url	https://doaj.org/article/cbfb343355dc486eac862b11a5636d05
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_version_	1718429925136924672

Understanding the role of Ownership Structure in the Board Strategic Decision-Making Process: A Multiple Case Study of State-owned, Pseudo-Private and Private Banks in Iran

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