What are the main implications of the 'shareholder' and 'stakeholder' models of corporate governance for the development of long-term human resource strategies? (ePub)

Seminar paper from the year 2007 in the subject Business economics - Business Management, Corporate Governance, grade: 1,0, London School of Economics, course: International and Comparative Human Resource Management, language: English, abstract: The purpose of this essay is to point out how far a particular type of corporate governance determines human resource strategy and to what extent different HR strategies can be and are used in different systems of corporate governance. In this case the covered types of corporate governance are the 'shareholder' and the 'stakeholder' model. Generally, corporate governance is a matter of who owns the rights and the authority to make and influence companies' decisions, which objectives are aligned and how it is controlled if executed decisions are together good ones. Corporate governance systems differ especially from the unequal role of shareholders and stakeholders, wherefore there exists the distinction between the 'shareholder' and the 'stakeholder' model of corporate governance. These differences have an important impact on the orientation of organizations' HR-strategies, which are becoming more important for enhancing companies' success. It suggests for this analysis to make a comparison between German and US corporations, which represent both a different type of corporate governance, as we are going to show. Before reviewing the implications concerning the specified above issue, first of all it is necessary to confront and define the main differences between the two mentioned models of corporate governance in Germany and the United States.