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Governance (Sport) - Literature review Example

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Number of researchers has attempted to provide a definition of governance in the area of management. Governance includes performance of responsibilities…
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Governance (Sport)
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Download file to see previous pages According to the definition provided by World Bank governance can be defined as “structures, functions, process and organizational traditions that have been put in place within the context of a program’s authorizing environment” (Du Plessis, Hargovan & Bagaric, 2010). The definition implies that the program must be created in such a manner which ensures that the objectives of the organization are met in an effective and transparent manner.
From these above definition it can be summarized that the primary function of governance is to guarantee that every member related to the organization performs their roles and responsibilities in a coordinated manner that maximizes coherence and accomplishes organizational goals. It is also implied that governance aims to achieve ethical implementation of business functions. Governance aims to provide overall direction to the business by overseeing and supervising actions of management. Governance makes sure that expectations of accountability are satisfied and interest beyond the corporate group is regulated.
The agency theory of corporate governance emerged in the 1970’s and has been cited as the central theory of management behaviour in a number of scholarly articles. The core agency theory does not consider issues of management, internal and external issues of stakeholders of and the society at large. Agency theory highlights the alignment of interest between the shareholders and board members. According to researchers like Fama and Jensen (1983) there exists asymmetric information between executive management (who are agents) and claimants (who are principals). Therefore the main focus of the agency theory is to minimize the clash between shareholders and governing bodies of organizations. It has been observed that in agency theory directors or executive management tries to appropriate the value for them and it is extremely difficult for the shareholders to examine whether the directors are ...Download file to see next pagesRead More
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