Business Research Methods example

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Business Research Methods

The title of the research work is “A comparison between the Rolls Royce’s Anglo-American and REC’s Chinese corporate governance models.” Rolls-Royce is an engineering company developing its business in five directions including civil aerospace, defense aerospace, power systems, marine, and nuclear (Rolls-Royce plc, 2017). Despite the company compliances the UK Corporate Governance Code, Rolls-Royce faces with illegal payments and corruptions in the Chinese division (Harris et al., 2017). The problem has a negative impact on the company’s reputation and profitability because Rolls-Royce was rated a lower 93rd for its corporate governance and had to pay £500 million penalties (Harris et al., 2017). A possible cause of this problem is lack of adaptability of Anglo-American corporate governance model to its international divisions. Perhaps the study which will investigate the gaps between Anglo-American and Chinese corporate governance models by study the main principles of the Corporate Governance of the Chinese companies could remedy the situation.

The aim of the study is to determine areas where Rolls-Royce can adapt Anglo-American corporate governance model to Chinese business context in order to improve the corporate effectiveness. The research question is whether there is a strong difference between Anglo-American and Chinese corporate governance models. The objectives of the research work are to study the difference between leadership and independence of the board and its committees, the effectiveness of risk management and internal control, the level of participation of shareholders, and the transparency of directors’ remuneration in Rolls Royce Group and REC Engineering Company Limited. REC Engineering Company Limited is one of the Hong Kong’s largest engineering companies providing the customers electrical and mechanical engineering services. The company conducts corporate governance according to the Chinese regulations, while Rolls-Royce Group compliances the UK Corporate Governance Code. Therefore, their corporate governance comparison will allow finding the gap between the Anglo-American and Chinese Corporate Governance Models.

According to the Crowther and Seifi (2011) corporate governance helps creating an environment of trust, ethics, moral values, and confidence at the workplace. The researchers differentiate three main models of governance: the Anglo-American, Latin and Ottoman models of corporate governance. If the Anglo-American model is hierarchical and imposed from above, the Latin model of governance is developed in the context of family and community connections and based on the bottom up philosophy (Crowther & Seifi, 2011). In comparison, the Ottoman model of governance is a distinct model that requires owners’ patronizing of operations in hierarchical manner and delegation of responsibilities and duties “in equitable manner” (Crowther & Seifi, 2011).

Strange et al. (2009) and Rygh (2016) explain corporate governance from the point of view of transaction cost economics, agency theory, resource-based view, and institutional theory. In terms of the agency based model owners delegate the control of a company to the managers who can make an effort to pursue their personal goals during the tasks implementation (Rygh, 2016). Transaction cost economics theory reports that a company can be emerged only in case the costs of organizing exchanges in the …

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