Discuss how structural and institutional factors in Britain and Essay

Discuss how structural and institutional factors in Britain and America may have limited the scope for improving corporate perfo - Essay Example Secondly, soft laws, which are encouraged by the highly influential Cadbury commission of institutional investors in the United Kingdom, which gets into contracts with portfolio companies. Thirdly, attention to issues of Corporate Social Responsibility, which is encouraged by â€Å"the Institutional Shareholders Committee, which represents over 80% of institutional investment in the UK† (Malhotra, 2009, p. 246). Institutional factors have a lot of influence on the performance of organizations. Limitations or possibilities for how and how quickly organizations can change depend on institutional factors. These â€Å"include factors such as to what degree policies-and the laws that formalize policies –are really driving actions of senior executives , civil servants and front line service providers† (Fowler, Acquaye-Baddoo, and Ubels, 2010, p.150), and how far a nation’s budget process is driven by interests of influential people or by policies. Presence or la ck of a positive relation between corporate governance and corporate financial performance has been used to test whether reforms in corporate governance have a positive impact on industries in Britain. According to Prasad â€Å"corporate governance refers to the relationship that exists between the different participants, and defining the direction and performance of a corporate firm† (2006, p.1). Corporate governance is vital in international business. Poor financial performance by corporate can be attributed to bad corporate governance. This can be seen in the case of the United States where â€Å"companies with weaker corporate governance structures (indicated by substantial agency problems) perform less well than companies with better corporate governance structures† (Solomon, 2010, n.p.). This can be clearly seen in the case of the United States where there is poor performance by companies with poor corporate governance structures, while those with good corporate governance structures perform well. Structural reforms in nations have had a number of benefits. Structural factors are important determinants of competitive business and growth prospects. Since the late 1970s, structural reforms have attracted a lot of attention by policy makers. In Britain, structural reforms began when the government â€Å"was under Mrs. Thatcher, it adopted a series of structural reforms to result in successfully reviving the British economy. The US government under President Regan followed Mrs. Thatcher’s policy by pursuing structural reforms and successfully rejuvenated the US economy† (OECD, 2005, p.24). In recent years, developed and developing countries have recognized the beneficial effects of structural reforms, and have therefore adopted them. Among these nations, some have successfully attained economic growth, while others haven’t been successful. From this it is clear that structural and institutional reforms can have positive or negative impacts on corporate performance in nations, which is among the factors that determine economic progress. Structural and Institutional Reforms in Britain and America