Short term orientation of subject of corporate governance as cause of the economic crisis

Radojević, Petar and Milivojević, Saša and Stefanović, Saša (2013) Short term orientation of subject of corporate governance as cause of the economic crisis. In: Post crisis recovery. Belgrade Banking Academy, Belgrade, pp. 280-293. ISBN 978-86-7852-034-1

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Abstract

Unlike most economists, which reason for the current economic crisis sees in the so-called "macro aspects” of higher aggregate level (deregulation of the financial system, the global trade imbalance between the U.S. and China, etc.). Study starts from the hypothesis that short-term of the shareholder goals and management opportunism are in direct correlation with the negative frame of corporate governance, which has contributed to the escalation of the global crisis. Dutch retailer Ahold was an example of the success of the strategy of business internationalization (through acquisitions) during the 90-ies of the last century but also an actor of greatest scandal concerning bad corporate governance in Europe in 2003. Case study analyzes the company's growth strategy as well as the consequences of bad corporate governance that led to the loss of investor confidence.

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