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Abstract: In this paper, we investigate relationships among stakeholders, focusing especially on management, shareholders, and employees. These three stakeholders play important roles in a corporation's decision making; they are the triumvirate. Essentially, we attempt to apply a "cybernetic" approach to understand relationships among stakeholders. The approach can offer an effective framework for analysing communications and control. By analogy, cybernetics has been used increasingly in relation to internet communication technologies (ICTs); thus, we use this feature for this paper.
The paper is divided into three sections: first, a cybernetic approach to corporate and stakeholder governance is elaborated. The word cybernetics comes from a Greek word, meaning "governance". Second, the concept of this paper is set out in a diagram below showing the relationships between management, shareholders, and employees. Also, agency theory applies to management and shareholders, and property rights theory applies to management and employees. Finally, we offer some conclusions. Each section takes a step-by-step approach to describing the relationships.
Keywords: cybernetics, corporate and stakeholder governance, agency theory, property rights theory, network
JEL Code: B41; C50; D23; D81; D82; D85; G32; L62; O33; P51
Introduction
Recently, we have heard a lot about the internet of things (IoT), artificial intelligence (AI), and wearable devices, based on using cyber-physical systems (CPS), which can establish global networks and common sensors. CPS makes the link between computational virtual (cyber) and real (physical) elements, supported by widely used and inexpensive sensors. For example, Google is now trying to make a self-driving vehicle. Google is approaching this with IoT-based knowledge for self-driving using their already stored big data. We are now facing a 'ubiquitous world' [1]. Here, we attempt to apply a cybernetic approach to understanding the relationship between stakeholders. The approach may offer a framework for analysing communications and control in the relationship between management, in the middle, the shareholders, and the employees. We think that networking is the key for making new connections to create new value, which is called innovation.
1. Socio-Cybernetic approach
Norbert Wiener introduced the socio-cybernetic concept in his famous "The Human Use of Human Beings" [2], by way of suggesting the control of a large current by a small voltage, as in the central processing unit (CPU) in a personal computer (PC). This notion...