Contingent Governance Research Articles

Making donations work in crisis management: A contingent governance transition in philanthropy in Wuhan's COVID‐19 response

AbstractIn response to public complaints about the chaotic management of donations during the emergency, the site of the first identified COVID‐19 case, Wuhan (in central China), underwent a contingent governance transition. And given the public complaints about the disorganized management of donations during the early stage of emergency management in Wuhan in January 2020, local governments initiated a minor governance transition in philanthropy, involving multiple stakeholders such as public and private charities, as well as private enterprises. In contrast to the abundance of literature on governance actors such as the state, the market, and societal actors, this review discusses the changes in governance mechanisms using publicly available data from governmental websites, policy documents, and news reports. It examines a minor governance change in local philanthropy from hierarchical bureaucratic governance to embryotic non‐monocentric governance and to expedient collaborative/interactive governance. Moreover, it highlights the yet‐to‐be institutionalized characteristics of the newly emerging governance models in China, a country where the traditional mode of hierarchical governance is dominant. This article not only adds to the body of evidence on governance failures caused by monocentric bureaucracy, but it also contributes to the literature on public governance transition in China's philanthropic sector and the state‐society relations more broadly.

Inter-partner control, trust, and radical innovation of IJVs in China: A contingent governance perspective

International joint ventures (IJVs) in emerging markets need to develop radical innovation to compete successfully in the rapidly changing business landscapes there. Taking a contingent governance perspective, this study examines how formal and social governance mechanisms, namely inter-partner control and inter-partner trust, affect radical innovation development in IJVs through knowledge acquisition and integration, and how emerging market institutional governance structures moderate the effectiveness of the two internal governance mechanisms. Based on a sample of 181 IJVs in China, we find that both inter-partner control and inter-partner trust promote IJV radical innovation; moreover, legal enforceability weakens the impact of inter-partner control but strengthens that of inter-partner trust on IJV radical innovation; likewise, government intervention risk weakens the positive role of inter-partner control yet strengthens that of inter-partner trust. This study extends both the innovation and IJV governance literature by connecting governance mechanisms to IJV radical innovation and uncovering important institutional contingencies.

The Contingent Role of Centrality in IT Network Governance: An Empirical Examination

Since the importance of collaboration across organizational boundaries for firms’ competitive success continues to grow dramatically, research on inter-organizational relationships has become prominent in business and information systems (IS) research. Particularly inter-organizational networks have been widely recognized by both academics and practitioners as an important form of multi-organizational governance. Those networks rely heavily on integrated information systems in order to generate value from co-creation, co-development, and co-innovation. Therefore, the integration of IS across partnering organizations has become the backbone of collaboration in inter-organizational networks. Despite the efforts invested in the field of IT governance arrangements, research still lacks empirical evidence on the relationship between governance choices and different internal and external network factors and their influence on governance effectiveness. Thus, this study sets out to expand the understanding of how network organizations can effectively develop and manage IS integration in order to co-create value. It contributes with a characterization of IT network governance arrangements along the dimension from highly centralized to highly decentralized IT related decision making in networks. Moreover, by drawing on contingency theory this paper develops a theoretical model proposing effective governance arrangements according to six contingency variables. A multiple case study methodology is applied in order to validate the theoretical relationships, and the data supports the basic structure of the research model. Our findings suggest that network size, network structure centralization, functional diversity, network trust, IT infusion, and IT competence are important factors for the understanding of effective IT governance arrangements in inter-organizational networks. The paper offers insights into the causal mechanisms behind the theoretical relationships and is a first step towards a more differentiated perspective on contingent governance structures in inter-organizational networks.

The Architecture of International Energy Governance

The study of international energy governance is in its youth. This fact may seem somewhat paradoxical. Many international energy institutions, such as the International Atomic Energy Agency (IAEA) and the Organization of Petroleum Exporting Countries (OPEC), have existed for fifty years or more. Energy has long been a major driver of global crises and national politics. The memory of the Arab oil embargo of 1973-1974 casts a long shadow over global energy debates, and American politics, to take but one example, continually return to the question of the appropriate balance between environmental protection and natural resource extraction. Yet despite energy's centrality to global and national politics, international energy governance--as distinct from national energy policies and international energy politics--has resisted the multilateral governance trend of the past several decades. There is no global World Energy Organization (the International Energy Agency (IEA) is an OECD agency and as such is not open for accession to most nations), and many of the major multilateral legal institutions such as the World Trade Organization (WTO) deal with energy only incidentally. Perhaps for this reason, it is only with surging demand for energy and the problems such demand creates for traditional areas of international cooperation, including trade and climate change, that energy governance has itself become an object of study again. In my remarks, I want to address three questions: Why is international energy governance so fragmented? Why is that fragmentation a problem? And what do we do about it? WHY IS INTERNATIONAL ENERGY GOVERNANCE SO FRAGMENTED? An alphabet soup of international agreements and organizations deals in some way or another with international energy: the WTO, the United Nations Framework Convention on Climate Change (UNFCCC), the Energy Charter Treaty (ECT), OPEC, the Gas Exporting Countries Forum (GECF), the IAEA, the International Energy Program (IEP) Agreement and IEA, and the International Renewable Energy Agency (IRENA), to name but a few. This list includes only intergovernmental organizations and neglects regional institutions such as the European Union or the North America Free Trade Agreement that influence international energy cooperation. The fragmentation in energy governance arises in large part because of path dependence. At no time did negotiators ever sit down and think about what an ideal international energy institution would look like. Instead, institutions were created to deal with issues and crises as they arose. Energy institutions thus tend to have mandates and powers shaped, not by considerations of desirable energy governance, but by historically contingent governance problems. The development of institutions dealing with oil illustrates the role of contingency. In the early 20th century, the most important governmental institution dealing with oil was the Texas Railroad Commission, which was able to influence global oil prices by regulating production levels in Texas. (1) In part to combat the influence on prices of U.S. authorities and multinational oil companies (the so-called Seven Sisters), oil-exporting states formed OPEC with the goal of renegotiating concession agreements with the multinational oil companies. (2) OPEC was wildly successful in this goal, and by the 1970s OPEC (and in particular Saudi Arabia) had emerged as the key swing producer of oil, capable of influencing global prices. Arab members of OPEC deployed this ability during the Arab oil embargo of 1973-1974. That crisis prompted oil-consuming nations to sign the IEP Agreement, which created the IEA and aimed to coordinate emergency response measures in the event of an oil price shock. As the development of oil institutions illustrates, the fragmentation of international energy governance is a result of the fact that many energy institutions have been created to respond to specific contingent governance problems, rather than long-term governance challenges. …

On the return of creditor’s right of limited liability companies

The contingent governance theory based on state-contingent ownership has exerted an important impact on economic academia, and its application in the field of company law is also of significant value. The lack of internal restraint mechanism and public supervision of limited liability companies makes it feasible to implement contingent governance. Under the mechanism of contingent governance, creditors of a limited liability company may intervene in its governance. The right of intervention is mainly reflected in three aspects, i.e., (1) mandatory debt-for-equity swap, (2) obligation of the actual controller to creditors when the limited liability company is on the edge of insolvency, and (3) creditor’s right of objection with respect to the decision of corporate substantial business.

Relaunching Regional Economic-Development Policy and Planning for Auckland: Remaking the State and Contingent Governance under Neoliberalism

Neoliberalisation in New Zealand has been driven further as a political project than in most other countries. After two decades of neoliberal economic policy, it is possible to examine how political-economic actors in subnational spaces have responded to vastly new conditions. I provide an account on how regional economic-development policy and planning has reappeared in Auckland in the postrestructuring period. By deploying relational – institutional and poststructural perspectives in the examination of key policy initiatives that coconstituted an emerging regional economic intervention trajectory, I discuss how economic governance has been assembled, assess its structural coherence and directionality, and analyse the role of the state. I argue that regional governance processes are characterised by contingencies, patterns of institutional experimentation, and, increasingly, the work of central state actors. What is not known to date, however, is whether new regulatory structures are having any major material effects on the course of New Zealand's largest regional economy.

Whither Japan's Corporate Governance

This paper examines the cumulative effects of gradual changes taking place in Japan's corporate landscape in general and corporate governance in particular in the past decade or so and regards it as an instance of institutional change which has not been completed yet. In order to substantiate this view, it first documents essential features of the changes and then interprets them using a game-theoretic framework of comparative corporate governance analysis. It identifies corporate governance institutions as multiple equilbria of game played between investors, managers and employees, and interprets the changes taking place in Japan as the transition from the model of Contingent Governance to that of stock market monitoring of complementary linkages between the managerial model and specific human assets of the firm.

Contingent governance and the enabling city

Focusing on the past two decades, Gerard Wigmans charts a fundamental change of approach in urban politics. The new model of urban policy, based on an "entrepreneurial" or "network" system of governance - as opposed to the previous hierarchical model - concentrates efforts on the city's economic re-branding and revitalisation, and has been instrumental in achieving positive social change. It is interesting to set this work in relation to Paul Stouten's analysis of the experience of large post-industrial cities in the Netherlands ( City , Vol. 4, No. 3, 2000). Wigmans argues that, in adopting practices of "contingent governance", the city's authorities have reacted appropriately to post-modern conditions. Pre-empting criticisms of an "anything goes" approach to city management, he concludes that "If there could be a supreme objective, then it has to be the agreement that plurality is always better than uniformity and consensus."

Team Coordination by Contingent Governance: A Primer on an N-form Problem

The article analyses the impact of contingent team governance on the costs of teamwork coordination. Contingent governance of teams is defined as a hierarchical intervention in teamwork, contingent on at least one team member?s request to do so. Contingent governance is an almost omnipresent phenomenon whenever teamwork is embedded in a sociocultural environment containing hierarchical elements. Contingent team governance can therefore serve as a conceptual framework to compare and evaluate otherwise disparate forms of teamwork. The article develops a teamwork taxonomy which allows for a systematic comparison of teamwork specific transaction costs and thereby for comparison of the competitive advantage of alternative forms of teamwork organization.

The governance structure of the Japanese financial keiretsu

We rationalize the cross-holdings of debt and equity within the Japanese keiretsu as a contingent governance mechanism through which internal discipline is sustained over time. The reciprocal allocation of control rights supports cooperation and mutual monitoring among managers through a coalition-enforced threat of removal from control. In financial distress this threat is less effective, and the governance mode shifts to hierarchical enforcement under main bank leadership. The model is consistent with the capital structure, the distribution of claims, the extent of intragroup trading, and patterns of investor intervention within the groups.

The Contingent Governance of Teams: Analysis of Institutional Complementarity

The first purpose of this paper is to design a model of governance structure, called the contingent governance, which can control the free-riding problem in teams in the second-best manner. The second is to show, by a new method of comparative static analysis, that the effectiveness of the contingent governance may be enhanced by complementary institutional arrangements of the imperfect labor market and bank-centered financial system. The paper discusses the implications of such institutional complementarity for the dynamic change of the Japanese main bank system and financial system design of transitional economies. Copyright 1994 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.