Corporations in Evolving Diversity Cognition, Governance, and Institutions

The present global economic crisis demands we look anew at the role of corporations, and the working of financial markets around the world. In this challenging and insightful book, one of our most eminent economists provides a compelling new analysis of the corporate firm; the role ofshareholders, managers and workers; and institutional governance structures.In recent decades the firm has predominantly been seen as an organization run and governed in the interests of shareholders, where managers act as the agent of shareholders, and the workers simply as instruments for share-value maximization. This book reverses this viewpoint. It sees corporations ascognitive systems where 'cognitive actions' are distributed amongst managers and workers, with shareholders in effect supplying 'cognitive tools' to them. Aoki analyses the different relationships that can exist between shareholders, managers, and workers from this perspective, and identifies arange of different models of organizational architecture and associated governance structures. He also discusses ways in which corporations act as players in social and political games, as well as global economic games; how these inter-related social dynamics may change particular, distinctivestructures into the diversity incorporated in the global corporate landscape; and how they now call for new roles for financial markets.

Masahiko Aoki is the Henri and Tomoye Takahashi Professor Emeritus of Japanese Studies in the Economics Department, and Senior Fellow of Stanford Institute of Economic Policy Research (SIEPR) and Freeman Spogli Institute for International Studies (FSI) at Stanford University. He is also Director of the Virtual Center for Advanced Studies in Institutions (VCASI) at Tokyo Foundation. Aoki is currently the President of the International Economic Association (2008-2011).

Aoki graduated from the University of Tokyo with a BA and MA in economics and earned a PhD in economics from the University of Minnesota in 1967. He was formerly an Assistant Professor at Stanford University and Harvard University and served as Professor at the University of Kyoto before re-joining the Stanford faculty in 1984. He is a Fellow of the Econometric Society.