Aims and Objectives of the project

Corporate Governance is defined as that process which is used by companies to achieve proper direction and control of their business. This process is being used so that the companies could be managed properly. Presently, the concept of Corporate Governance has gained attention due to corporate failures in the global as well as domestic market. Corporate Governance defines the relationship between management of a company, their boards and the shareholders (Darko, Aribi & Uzonwanne, 2016). This concept is becoming a global issue due to the growth of modern economies where a major role is being played by private sectors for the growth process. From the past studies, it has been identified that poor corporate structures result into risk that could occur as a threat for economy. It is evident that corporate governance has positive impact on profitability of an organization. However, there are some gaps which have to be covered to determine the use of corporate governance mechanisms for enhancing organizational profitability.

This project is focused on investigating the impact that Corporate Governance have on the company profitability. This project also aims at determining the relationship of corporate governance with organizational profitability. In this study, the examination will be done to demonstrate on the corporate governance mechanisms that affects the profitability of companies and how those could be used to improve the organizational profitability.

The objectives that has been determined for achieving aim of the project are presented as below:

• To determine the relation of board size with profitability of an organization.
• To investigate the impact and contribution of independent directors on organization profitability.
• To measure the impact that Audit committee have on the profitability of an organization.

The study is aimed at reflecting the use of corporate governance as a tool for improving profitability of an organization hence, the research questions has been prepared as below:

• How organizational profitability is related to corporate governance?
• How corporate governance affects the profitability of an organization?
• How the use of corporate governance as a tool will help to improve profitability of an organization?

According to Amba (2014), Corporate Governance is rising as emerging area of study for research and the previous studies demonstrate that it is being viewed by various scholars from different perspectives. Corporate governance helps to enhance the operational efficiency of organizations with the help of proper management and decision making capabilities. According to Larcker and Tayan (2015), two different growth propelling elements such as transparency as well as accountability in an organization can be promoted with the help of corporate governance.

Simultaneously corporate Governance can also increase the operational effectiveness and efficiency of the business organizations. All efficiently running organizations can again promote stability of their operational system and thus support the commercial success in terms of growth. This approach makes sure that all the associate stakeholders are professionally and fairly treated by the company. In order to enhance the corporate growth and sustainability due largely according to its capacity within a liberalized market economy the corporate governance is capable of promoting both the domestic and foreign capital. Black et al. (2015) stated that, accountability, fairness, responsibility and transparency can be successfully promoted with the help of the corporate governance.

On the other hand, Filatotchev and Nakajima (2014) opined that, corporate governance practice can promote the market liquidity and confidence of investors. In other words, the issues of financial crime can also be completely resolved with the implementation of corporate governance. It has been analyzed that, efficiency of corporate governance structure is complete directed or linked to the profit performance and it has also vast potential to govern capital formation with the help of tax revenue.

Research Questions

Overall it has been revealed that its application in the organizations can increase the efficiency of the fund allocation, promote savings and thus not only the cost but also the information access ability gets enhanced from the user’s perspectives. Based on the varied circumstances different strategies for corporate governance are required to be adopted by the organizational heads (Giannarakis, 2014). In different countries this approach is applied for creating a balance among the project manager, stakeholders, creditors, suppliers and consumers as well. This approach is also referred to as an insider model which helps to generate corporate control.

The success and failure of any firm or organization is completely dependent on the corporate governance method or approach that is followed by the company itself. Both the inter-organizational and intra organizational conflicts can be completely minimized or resolved with the help of the corporate governance activities. However, on the other hand, Rozman (2017) argued that, if any organization fails to hold the balance between corporate governance and financial performance then the entire operation and functional sustainability of the organization will be intermittent. The ethical perspectives are also required to be considered and maintained by the organizational executives while developing the organizational aims and objectives. Most importantly based on the type and size of the project that the organizations have undertaken, the governance theory should be followed.

According to Giannarakis (2014), the proper application of corporate governance principles helps to enhance the profitability along with high returns on investment and increase in competitiveness. It has been found that board of directors have an important role to play in the performance of a firm so that desired profits could be achieved from their business. Eccles, Ioannou and Serafeim (2014) also stated that if the principles of corporate governance are being followed rigidly then it would lead to higher profit margins for the company. It has also been identified that there is positive influence of corporate governance on the organizational profitability.

This section illustrates on the approach for executing the research project has been presented that could be adopted to achieve the desired outcomes. The discussion on the procedure that will be followed to acquire desired results from the research has been illustrated in this section. The theories and concept of research methodology has been used to prepare the research plan for this research project.   

Typically, three types of philosophies are there which are used in research projects that is Realism, Positivism and Interpretivism. The philosophy is an essential element in research methodology as it provides path for carrying out the research. The research philosophy has to be aligned properly to analyze the research topic as per the desired requirements (Taylor, Bogdan & DeVault, 2015). Positivism philosophy helps to reveal the desired outcomes in a scientific manner while Interpretivism is related to determining the association of research topic with the business and management world. Realism is considered as a mixed research philosophy that comprises of both the features of Positivism and Interpretivism.

For this particular research project, Positivism will be suitable to analyze the topic better and achieve desired outcomes. This philosophy is beneficial as the time for research is limited and it will also provide support for data collection.

Literature Review

For developing a suitable framework to carry out this research project, it is essential that an appropriate research design have to be selected. The research design helps the researcher to determine techniques or methods that have to be followed for achieving the desired outcomes from the research. There are different types of design that could be adopted to fulfill the desired objectives and goals of the research (Flick, 2015). Basically, Exploratory, Explanatory and Descriptive design is being used to execute research projects. The research design is used to identify and collect data on the research topic so that desired outcomes could be achieved from the project. Exploratory design is suitable as it helps to acquire different ideas and thoughts required for completing the research. Explanatory design is suitable for describing the events, incidents or situations that are related to the research topic (Dang & Pheng, 2015). While Descriptive design is related to analysis and detailed evaluation of the concept related to the selected research topic.

For this particular research, it has been determined that Descriptive design will be appropriate to acquire the desired results on the impact of Corporate Governance on profitability of an organization. In this context, the other two research designs will be discarded as those are not appropriate to achieve desired outcomes from the project and support will could not be gained

Population is referred to the number of participants that will be directly or indirectly involved in the project. The participants will be responsible for providing their views on the selected research topic. The feedback from the participants will be examined with the help of certain statistical analysis techniques to achieve desired outcomes from the project.

The sample size that has been determined for the project is 100 which will comprise of various people from the management level in different companies. The sampling technique that has been selected for this particular research project is random sampling (McCusker & Gunaydin, 2015). This means that the participants will be selected randomly from the people being gathered for the acquiring their feedback or opinion on different aspects of the research topic.

The data collection will be carried with the help of online survey questionnaires which will be distributed among the chosen sample for this study. The participants will fill out the survey questionnaire forms at their own convenience and data will be collected through the responses to questions in the survey questionnaire.

This research is aimed at determining the impact of the Corporate Governance on the profitability of organizations and the used of corporate governance mechanisms to enhance organizational profitability. The data will be collected based on the concept of corporate governance and its relationship with organizational profitability. The data collected through online survey questionnaires will be used for analysis using statistical analysis tool that is Multiple regression analysis. A regression model will be prepared for the data that will be achieved as responses from the survey questionnaires.

The ethical issues that will be taken into consideration during execution of research project are listed as below:

Involvement of the participants: The participants have to be encouraged to express their views and opinions on the corporate governance structure in their company.

Anonymity of the participants: The information of the participants has to be kept secure and confidential (Flick, 2015).

Validity of data: The data that will be collected should be validated to ensure desired outcomes are achieved from the research.

                                                              Figure 1: Timeframe for the research project

                                                                       (Source: Created by Author)

References:

Amba, S. M. (2014). Corporate governance and firms’ financial performance. Journal of Academic and Business Ethics, 8(1).

Black, B. S., Kim, W., Jang, H., & Park, K. S. (2015). How corporate governance affect firm value? Evidence on a self-dealing channel from a natural experiment in Korea. Journal of Banking & Finance, 51, 131-150.

Dang, G., & Pheng, L. S. (2015). Research methodology. In Infrastructure Investments in Developing Economies (pp. 135-155). Springer, Singapore.

Darko, J., Aribi, Z. A., & Uzonwanne, G. C. (2016). Corporate governance: the impact of director and board structure, ownership structure and corporate control on the performance of listed companies on the Ghana stock exchange. Corporate Governance, 16(2), 259-277.

Eccles, R. G., Ioannou, I., & Serafeim, G. (2014). The impact of corporate sustainability on organizational processes and performance. Management Science, 60(11), 2835-2857.

Filatotchev, I., & Nakajima, C. (2014). Corporate governance, responsible managerial behavior, and corporate social responsibility: Organizational efficiency versus organizational legitimacy?. Academy of Management Perspectives, 28(3), 289-306.

Flick, U. (2015). Introducing research methodology: A beginner’s guide to doing a research project. Sage.

Giannarakis, G. (2014). Corporate governance and financial characteristic effects on the extent of corporate social responsibility disclosure. Social Responsibility Journal, 10(4), 569-590.

Larcker, D., & Tayan, B. (2015). Corporate governance matters: A closer look at organizational choices and their consequences. Pearson Education.

McCusker, K., & Gunaydin, S. (2015). Research using qualitative, quantitative or mixed methods and choice based on the research. Perfusion, 30(7), 537-542.

Rozman, R. (2017). The organizational function of governance: Development, problems, and possible changes. Management: journal of contemporary management issues, 5(2), 94-110.

Taylor, S. J., Bogdan, R., & DeVault, M. (2015). Introduction to qualitative research methods: A guidebook and resource. John Wiley & Sons.