Decentralized Governance Structures Are Able to Handle CSR-Induced Complexity Better

Michael Pirson; Shann Turnbull

doi:10.1177/0007650316634039

journal article Feb 26, 2016

Decentralized Governance Structures Are Able to Handle CSR-Induced Complexity Better

Michael Pirson Shann Turnbull

Business & Society Vol. 57 No. 5 pp. 929-961 · SAGE Publications

View at Publisher Save 10.1177/0007650316634039

Abstract

This article explores how both corporate governance and corporate social responsibility (CSR) can be improved by using insights from complexity theory. Complexity theory reveals that decentralized governance architecture is required for firms to absorb competently the increased intricacies, variety of variables, and objectives introduced by CSR. The current predominant form of centralized governance based on command-and-control hierarchies copes with complexities by reducing data inputs. This approach results in firms reducing their objectives, concerns, and insights about CSR. Firms with a decentralized “network” form of governance architecture are used to illustrate how the data inputs of each manager can be reduced through the decomposition of decision-making labor to improve the capability of the firm to intelligently absorb and manage complexity. Network governance also introduces a division of powers with stakeholders to facilitate information flow and strengthen incentives to manage the enterprise to enhance both shareholder value and CSR.

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Details

Published: Feb 26, 2016
Vol/Issue: 57(5)
Pages: 929-961
License: View

Authors

M

Michael Pirson

Fordham University, New York, NY, USA

S

Shann Turnbull

Institute for Self-Governance, Sydney, Australia

Cite This Article

Michael Pirson, Shann Turnbull (2016). Decentralized Governance Structures Are Able to Handle CSR-Induced Complexity Better. Business & Society, 57(5), 929-961. https://doi.org/10.1177/0007650316634039

Decentralized Governance Structures Are Able to Handle CSR-Induced Complexity Better

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