Teses de Doutorado
URI permanente desta comunidadehttps://repositorio.insper.edu.br/handle/11224/3242
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Tese Stakeholder Governance and Decision-Making: Dealing with Preference Heterogeneity and Uncertainty(2024) Freire, Vitor de Barros SantosThis dissertation examines mechanisms of strategic stakeholder governance, advancing the understanding of how firms can incorporate diverse stakeholder perspectives in high-level strategic decision-making forums such as corporate boards. Central to this research objective is the understanding that value creation demands governance structures that reconcile heterogeneous stakeholder interests and, at the same time, deal with potentially escalating decision-making costs and promote adaptation to changing circumstances. The dissertation is comprised of three chapters examining the nuanced challenges and mechanisms concerning corporate boards, blending theoretical propositions and empirical testing using laboratory experimental methods. The initial chapter presents a decision-based theory of stakeholder governance. It explores the interplay between stakeholder engagement and decision rights allocation within corporate boards, when facing contingencies like the boundaries on stakeholder claims (the extent of stakeholders' interests considered) and the nature of the decision problem under consideration. The chapter follows a comparative organizational analysis and examines different governance patterns that fit these contingencies to propose a combination of aspects related to the allocation of decision rights, corporate objectives, and deliberation mechanisms aligned with the contingencies to facilitate decision-making and adaptation, resulting in a theory of stakeholder governance explaining the arrangement of decision-making forums to accommodate distinct stakeholder demands. The second chapter empirically examines a specific mechanism of board decision-making under uncertainty. The research investigates conditions in which boards tend to make choices that avoid negative externalities and safeguard vulnerable stakeholders. The chapter tests the hypothesis that when facing uncertain outcomes and divergent opinions, boards following a unanimous rule for decision tend to opt for choices that mitigate negative externalities over higher financial gains. The experimental results show that, under such conditions, boards have a surprisingly strong preference for the alternative that avoids negative externalities, even when it entails lower financial results. The chapter then investigates the factors leading the boards to adopt such a cautious attitude and argues that besides an increased perception of uncertainty in groups, the critical influence of the unanimity rule is likely a main factor. The final chapter, then, delves into the comparative effects of the unanimity rule in comparison with the widely adopted majority decision rule. This chapter builds upon the same behavioral mechanisms discussed in the second chapter and examines the trade-offs between adopting a unanimity rule versus a majority vote. Experimental results show that unanimity enhances the board's tendency towards precautionary decisions and also increases confidence in the collective decision, yet it also necessitates more deliberation efforts. The extra efforts can complicate decision-making in business environments that require prompt decisions, suggesting a critical trade-off between inclusive decision-making and swift decision-making. In sum, this dissertation sheds light on the intricate balance between managing heterogeneous stakeholder demands and dealing with the decision-making costs that emerge when their multiple demands are considered. It offers valuable insights into how governance structures can be designed to manage the tensions between diverse stakeholder interests, the decision-making costs of considering diverse interests, and the need for adaptation in changing business landscapes. The findings underscore the importance of considering both the necessity of inclusiveness regarding stakeholders' interests and the decision-making costs permeating deliberation mechanisms. This dissertation therefore contributes to the evolving literature on stakeholder governance by examining decision-making processes, their underlying theoretical determinants, and the mechanisms that decision-making forums may adopt to reconcile multiple stakeholder demands.