Conclusion and Organising Framework
Chapter 3: Methodology
Introduction
Of the two methodological approaches for the study of corporate governance, the historical preference has been for quantitative methods (Burrell & Morgan 1979; McNulty, Zattoni &
Douglas 2016), and to date most governance studies have relied on archival data for empirical analysis (Aguilera, Florackis & Kim 2016). From an objectivist standpoint (positivism), organisations are viewed as an existing reality, which can be studied at a distance, with scholars attempting to apply the methods used for the study of the natural sciences to the field of humans and their affairs. Nonetheless, there is a promising, yet still emerging line of research based on qualitative methods and different ontological and
epistemological assumptions (Ahrens, Filatochev & Thomsen 2011; Huse et al. 2011; Jain &
Jamali 2016). Qualitative studies remain a fraction of all published work, although they are on the rise due to their unique nature and value to the study of corporate governance
(McNulty, Zattoni & Douglas 2016), to the broader field of management (Bluhm et al. 2010;
Van Maanen 1979) and to international business (Birkinshaw, Brannen & Tung 2011). Since in this thesis I adopted an interpretivist, qualitative research strategy, specifically the case study approach, before elaborating on this choice it is important to clarify the difference between the two methodologies in relation to their meaning in corporate governance.
The adoption of quantitative methods is aligned with the assumptions of the functionalist paradigm of positivism, viewing the world as an ordered phenomenon which we can measure and explain (Burrell & Morgan 1979). Functionalism is characterised by the definition of a framework of analysis prior to approaching the object of investigation (Schultz & Hatch
1996), for instance boards or individual directors. Quantitative research progresses through the observation, test, rejection or confirmation of hypothesis under assumed levels of confidence, with generalisation aims from a sample of the reference population. Corporate governance studies attempting, for instance, to infer causality between board structure and the financial performance of a company, or board interlocks and sustainability reporting, belong to this tradition. Intricate models (such as regression equations or structural equation modelling), are developed to demonstrate that variables co-vary or trigger other variables to change. Interpretivist scholars call for theory to be anchored in the experiences of the
protagonists of a certain phenomenon, in order to truly comprehend how events play out at a particular time, hence the need to examine these protagonists directly (Langley 1999;
Mintzberg 1979; Shah & Corley 2006; Van de Ven 1989; Weick 1995) and the case for qualitative research, viewed as the descendant of the interpretivist paradigm, rather than the positivist tradition (Bluhm et al. 2010; Flick 2014). However, Lin (1998) notes that
qualitative studies can be positivist as well as interpretivist. For instance, a study can aim to uncover practices that might consistently lead to a certain outcome. A qualitative study can also attempt to understand the meaning of general concepts in a specific context at a specific time, to uncover explanations and meanings attached to them by a specific set of people.
Consequently, the differences in interpretivist and positivist qualitative studies would appear to be found in the philosophical assumptions made about knowledge, reality or the world, as well as in the type of questions that are generated and asked, and the conclusions drawn.
Interpretivist, qualitative studies regard social phenomena as a construction by social actors through the media of culture, beliefs and language (Bluhm et al. 2010). Reality is believed to be constructed, rather than existing objectively. Culture, beliefs and language are tools to
ponder and act on reality, thus knowledge generation is anchored in the epistemological assumption that reflexivity, the understanding of the socially constructed reality and contextuality, is necessary to comprehend events. As Bansal and Corley (2012, p. 510) suggest, ‘the signature of qualitative research is its solid grounding in the phenomenon’, implying getting ‘inside’ a phenomenon, in this case director engagement with corporate purpose and regarding it with the eyes of a detective (Yin 2014). Given the research problem, aims, objectives and questions, the strategy I followed in this thesis was one which could lead me to ‘first-handedness’ (Birkinshaw, Brannen & Tung 2011, p. 574), a key characteristic of qualitative studies. This choice also implied that I made describing the journey the hallmark of this thesis, as is usual in qualitative studies (Bansal & Corley 2012).
The view of reality as socially constructed is a very important point worthy of further
elaboration, as it profoundly influenced me as researcher and therefore this study in corporate governance. In subjectivist approaches, as the qualitative tradition, the key ontological
assumption is that corporate governance is a socially constructed term (Ocasio & Joseph 2005) and reality (Morgan & Smircich 1980), a reflection of social values, a specific ideological point of view and a set of assumptions (Leblanc 2003). This implies that the positivist claim of absolute truths in governance is arguable and entails certain
epistemological issues, for instance, that after decades of studies rooted in agency theory and input-output models of governance ignoring the role of human processes, our knowledge of governance phenomena is partial and far from complete (Aguilera et al. 2015; Kumar &
Zattoni 2019). Studies continue to view governance as an objective reality, a ‘concrete structure’ and directors as ‘responders’ (Morgan & Smircich 1980, p. 492), able to be understood through secondary data, surveys and quantitative methodologies. Although this
approach has its merits and is considered ‘parsimonious’ (Kumar & Zattoni 2019, p. 5), relying on available data as a proxy for human processes and behaviours, an increasing number of studies adopt qualitative approaches in investigating human dynamics and processes in governance (Bezemer, Nicholson & Pugliese 2018; Federo & Saz-Carranza 2018; McNulty & Pettigrew 1999; Ravasi & Zattoni 2006; Schwarz-Ziv & Weisbach 2013;
Seierstad et al. 2017; Tuggle et al. 2010).
A very clear example of the consequences of traditional ontological and epistemological assumptions in the field is offered by Boivie et al. (2016), who challenge the decade-long assumption that directors can be effective in monitoring executives, suggesting that this might not be realistic, and conceding that ‘boards might not make much of a difference in many cases’ (p. 348), which begs an exploration of how directors might matter. Given that my concern is how directors engage with purpose under the influence of institutional investors, as opposed to a verification of the hypothesis that institutional investors might correlate to engagement, I regarded the interpretivist, qualitative approach as an appropriate choice. Thus, I regard an in-depth examination of the phenomenon of director engagement in a particular context and time most appropriate for answering the research questions, in the hope of contributing new interpretations to SC theory, and the study and practice of corporate governance. The remainder of this chapter is organised as follows. Firstly, I present
autobiographical notes and present myself as researcher; secondly, I elaborate on my
reflexivity and its influence on this study; thirdly, I present and justify the choice of the case study approach; and fourthly, I introduce the context of the case. I conclude by presenting the pilot study and how it informed the choices I made in focussing the main study.