Keywords

Privatization; Culture: Financialization, Corporate Governance.

Justification / Motivation

The process of capital internationalization with the new logic of financial management, called financialization and the new organizational form known as corporate governance are changes that affect the enterprise. These new forms of management and organization also affect their key players and their forms of interrelationship. In order to point out changes in the way of thinking about management and organization, according to its directors, in a company that went through the privatization process, we are present an exploratory study in Eletropaulo, an electrical company in São Paulo, which serves to address and characterize the reality associated with the model of financialization widespread in contemporary global market. The analysis of Eletropaulo in relation to culture and value change in the reference period, post-privatization, is inspired by current theoretical neo institutionalism and the studies on institutional change, deregulation and globalization.

Research Problem

Eletropaulo suffered a management restructuration, from a state-owned company culture to provide power to the public to in a culture geared to financial globalization. Thus, among the possible changes undergone by Eletropaulo due to its privatization, we highlight what we understand according to Granovetter (2007), as the embeddedness of a new culture. Thus, the research problem that runs through the verification of the process of embeddedness that significantly changed the organizational design and dynamics of the company Eletropaulo.

Methods

Literature review concerning the revolutions of the firm, managers and the increase in shareholder value associated with corporate governance. Survey data on the Eletropaulo company’s website, in its library and the Heritage Foundation for Energy and Sanitation and the Securities and Exchange Commission. Analysis of the company’s board members and directors curriculum, since its emergence as a state-owned enterprise in 1979 to the current year 2012.

Discussion

The rise of financialization brought consequences for organizations, as it deals with financial markets and the demands of shareholders. According to Fantti (2011) the concepts of value creation for shareholders and corporate governance in organizations became present. The generation of shareholder value in the financial logic gives preference to short term financial gain, buying and selling shares of companies, in the detriment of the production process, characterizing in a shareholder revolution.

The organization is now following the value based models: organizational decision, projects, responsibilities, remuneration and reward. Also noteworthy is the executive compensation, not the amount involved, but how such compensation is structured and paid.

Corporate governance studies suggests that in the enterprise environment exists what is called agent-principal problem, that is, modern corporations are not addressed by the shareholders (principal), but by managers (agents). These two groups have conflicting interests: the shareholders want to maximize their returns in the long run, because they are owners of the company, on the other hand managers want to maximize their short-term compensation. Issues that support the debate on institutionalization, theory of the firm and the shareholder revolution.

Expected Results

Contribute to studies on how the institutionalization and career building occurs in companies that are undergoing transformation processes through the financialization of the economy.