Academic journal article Competition Forum

The Institutional Context of Corporate Governance Structure That Generates Collaborative Practices and Distinctive Competencies in Human Resources: A Study of Mexico and Colombia

Academic journal article Competition Forum

The Institutional Context of Corporate Governance Structure That Generates Collaborative Practices and Distinctive Competencies in Human Resources: A Study of Mexico and Colombia

Article excerpt

INTRODUCTION

Corporate governance can be defined as formal and informal institutional arrangements. The companies used to resolve disputes that have arisen from the interplay of stakeholders. These institutional arrangements define the structure of ownership and control. Its functions are the following (Chavarín-Rodriguez, 2011): Operation of the board of directors, the investors, incentives for managers and workers, control mechanisms to manage and finance enterprises.

The purpose of this investigation is to analyze how the institutional context with the structure of corporate governance practices, can generate the collaboration and development of distinctive capabilities of the human resources that lead to the company to a competitive advantage. This paper has the following structure: to discuss the institutional context of corporate governance, that reviews the theoretical framework and review of the literature. We propose the methodology to develop and discuss the results and conclusions.

Corporate Governance Institutional Context in Mexico and Colombia

There are scholars who argue that the current economic thought and its contribution to the society can only be understood from the advances of institutional economy. Caballero Miguez argues (2011): "it is a reference from the economics field of the early twenty-first century." The New Institutional Economy leads the institutions to return to the main agenda research of economists. However Douglass North conceived the institutions as rules.

With these theoretical assumptions there are some differences between Mexico and Colombia in terms of regulations and voluntary codes adopted by companies. It may have been explained, perhaps by the size of the capital market in Mexico, where there are 136 issuers (Bolsa Mexicana de Valores, 2013) and in Colombia there are 81(Bolsa de Valores de Colombia, 2013). According to the Corporate Governance Forum (2012), the regulations have been developed in Mexico under development market. Today, companies are required to comply with certain aspects of good practice, which are included in the new securities Market Law (LMV), which came into force in December 200 and had replaced in 1975.

In 2010 the Consejo Coordinador Empresarial edited a new version of the Code of "Best Corporate Practices" for companies that are listed on the Mexican Stock Exchange, which must annually report their affinity with the practices of the corporate governance that appear in this new code. Besides of that, they have to publish reports under IFRS (International Financial Reporting Standards) (Corporate Governance Forum, 2012). However, Colombia, started in 2001 with the Resolution 072 sought a regulation for public adoption of good corporate practices codes, but it was until 2005 when the Ley de Mercado de Valores (Stock Market Law) began (Cano Orduz, & Ramirez, 2007) and in 2007 was published the Código País (Corporate Governance Code) which is voluntary and, therefore, has not been well accepted by the companies, which are not interested (Riano, 2009).

The Corporate Governance, Agency and Stakeholder Theories

Eiteman, Stonehill and Moffet (2007) define corporate governance as the set of relations through which stakeholders of the company establish and control the strategic direction and their results. Under this, corporate governance mechanisms are understood as the methods by which establishes an order in companies to make decisions. They are representing the collective interests, strategies and firm performance are influenced by corporate governance mechanisms.

We have identified two theories that studies to the corporate governance: one is the agency theory and the other is the stakeholder theory (Jensen & Meckling, 1976; Donaldson & Preston, 1995), The first one talks about that the ownership in large companies is diversified in multiple shareholders who transfer authority in decision-making to managers in order to achieve optimum business performance, but in turn, this causes difficulties to obtain information about the actions by the management. …

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