A Decision Dynamics Model of Cost Control and Corporate Governance

The Journal of Developing Areas, Volume 49, Number 2, pp. 397-405, Spring 2015

10 Pages Posted: 4 Jan 2015

See all articles by M. Abdullah

M. Abdullah

University of South Australia

Md Wahid Murad

University of South Australia; University of South Australia

Md. Hasan

Universiti Utara Malaysia; Green University of Bangladesh

Date Written: January 3, 2015

Abstract

This study is an attempt to develop a conceptual decision dynamics model in order to analyze the relationship between cost control and corporate governance. The model discusses why it is important to uphold the shareholders' interests and minimize the destructive events that usually occur in corporate cultures. This study argues that corporate governance must help retain the best interests of all the internal and external stakeholders and safeguard organizational resources from misuse, abuse, or practice of self-interests of the managers. It also argues that since protecting an organization’s interest requires protecting the interests of all stakeholders, cost control by that organization should be well guided by the corporate governance principles in ways that provide strongest safeguard of interests of all those stakeholders. Thus, a sound corporate governance policy requires adopting the standards and mechanisms that would maximize stakeholders’ financial and non-financial interests. This study concludes that cost control and corporate governance must operate in pragmatic ways in order to improve efficiency and foster capabilities of the organization and to protect simultaneously the interests of all the stakeholders.

Keywords: decision dynamics, cost control, corporate governance, stakeholders’ interest

JEL Classification: G31; G34; M14; O16

Suggested Citation

Abdullah, M. and Murad, Md Wahid and Hasan, Md., A Decision Dynamics Model of Cost Control and Corporate Governance (January 3, 2015). The Journal of Developing Areas, Volume 49, Number 2, pp. 397-405, Spring 2015, Available at SSRN: https://ssrn.com/abstract=2544837

M. Abdullah

University of South Australia

37-44 North Terrace, City West Campus
Adelaide, South Australia 5001
Australia

Md Wahid Murad

University of South Australia ( email )

North Terrace
Adelaide, South Australia 5001
Australia
5001 (Fax)

HOME PAGE: http://https://people.unisa.edu.au/Wahid.Murad

University of South Australia ( email )

City West Campus
North Terrace
Adelaide, South Australia 5001
Australia
+61 8 8302 0384 (Phone)

HOME PAGE: http://https://people.unisa.edu.au/Wahid.Murad

Md. Hasan (Contact Author)

Universiti Utara Malaysia ( email )

Sintok, Kedah
Malaysia

Green University of Bangladesh ( email )

220/D, Begum Rokeya Sarani
West Kafrul, Dhaka 1207
Bangladesh

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