Essays on Correlation between Organizational Performance and Corporate Governance Literature review

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The paper “ Correlation between Organizational Performance and Corporate Governance” is a thoughtful example of the literature review on management. Corporate governance is defined differently by different scholars. Donaldson (2012) defines corporate governance as a collection of institutions, policies, and rules influencing the controllability of a firm. According to Edwards and Clough (2005), corporate governance refers to the ways in which an association is controlled and directed. Corporate governance concerns the definition of processes and structures with the aim of monitoring as well as facilitating the organization’ s effective management and mechanisms. This guarantees legal acquiescence and stops unlawful or improper behavior.

In addition, OECD defines corporate governance as a packed relationship set among shareholders, board, and management of a company. It gives the structure by which the company’ s objectives are set and determine the methods of achieving the set objectives as well as performance monitoring (Alena et al. , 2011). On the other hand, Kemp and Parto (2005) view sustainability as a process of adaptive change that is socially instituted and wherein innovation is an essential element. According to Donaldson (2012), the governance theory aims at understanding and influencing behavior and at least serves relatively as an organization normative theory of design and choice.

This implies that policies, rules, and other governance elements are what guide or control the firm. Corporate governance focuses extensively on control mechanisms and control issues of the firm from the top downward. It includes all firms’ types and its meaning would broaden to cover every non-economic and economic activity (Bechinann et al. , 2011). There are two dimensions involved in corporate governance which are governing body or board responsibility.

These two dimensions include performance and conformance. Performance dimension entails monitoring of CEO and organization performance. It involves setting goals for the organization and coming up with strategies that will assist in attaining the goals (Claudia & Stafen, 2010). Additionally, the strategies ensure the organization is responsive to varying demands of the environment that comprise the risk of management and prediction.


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