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Countries use different corporate governance approaches based on the policies and laws, which inform their economies and business dynamics. In this regard, the Continental European model embraces a broad range of stakeholders. It adopts Latin and German characteristics, focusing on fulfilling commercial activities in a socially responsible manner (Maszczyk, 2020). On its part, the Anglo-American approach concentrates on maximizing capital growth and shareholders returns. Based on the two models features, I would prefer the Continental European type of political economy. It is essential to embrace a business approach, which considers broader social classes of all stakeholders, including creditors, employees, communities, suppliers, and the environment. Unlike the Anglo-American system concentrating on meeting the shareholders needs at the expense of other market stakeholders, the Continental European economy context incorporates the entire business communitys interests and needs. Therefore, I prefer the Continental European model to ensure that every stakeholder feels incorporated in building the economy, thus creating a socially responsible trading environment where everyone is responsible and satisfied.
Additionally, the Continental European nations, such as France and Belgium, allow private companies and individuals to act directly in the market without agents control of the shareholding. These less restrictive policies give equal opportunity for all persons and entities willing to participate in the market. According to Maszczyk (2020), the Anglo-American models harsh regulations limit the freedom of financial institutions participation in the market, thus creating a monopoly of large companies, which act as agents. Besides, in the Continental European economy, few firms are publicly traded, enabling people to invest their savings individually. As a result, there is a robust personal relationship between the shareholders and the management. In this way, there are constructive deliberations on strategies to maximize the shareholders returns while adopting rational social corporate responsibility policies. Finally, in addition to generous unemployment benefits, the Continental European approach utilizes strict employment protection legislation, which defends employees against unreasonable firing.
Reference
Maszczyk, P. (2020). The comparative empirical analysis of the social protection system in selected Central and Eastern European countries: Emerging models of capitalism. International Journal of Management and Economics, 56(2), 159-175. Web.
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