Traditional corporate governance scholarship excessively focused on the after-effects of separation of ownership from control. While American corporations were characterized by diffusely held ownership structures, most continental and Asian countries were marked by the concentrated ownership morphology. Traditional scholarship, however, did not account for this morphology. Thus, even seven decades after Berle and Means proposed their theory of separation of ownership from control, research did not move away from its previous unilateral focus. Unlike the market-centric model where markets are central to disciplining corporate misgovernance, the relationship-based model is considered to be more proactive with stakeholders playing a vital role in controlling misgovernance. In this paper, the author tries to explain the competing governance model with Japanese Kieretsu and German co-deterministic governance models. While some researchers have argued that concentrated ownership models perform better than the widely diffused ones, others argue that relationship economies are characterized by weak minority shareholder protection. However, concentrated ownership firms, despite their illiquid markets, have stayed alongside the Anglo-American firms and have consistently performed better.

While the traditional corporate governance scholarship excessively focused on the aftereffects of separation of ownership from control (Anglo-Saxonic Model), not much thought has been given to another competing dimension where ownership and control were either vested with a single equity holding entity or with a group of entities sharing relational ties. This was primarily due to the assumption made by researchers that Berle and Means firms existed worldwide.1 While American corporations were characterized by diffusely held ownership structures, most continental and Asian countries were marked by the concentrated ownership morphology. However, traditional scholarship did not account for this morphology. Thus, even seven decades after Berle and Means proposed their theory of separation of ownership from control, research did not move away from its previous unilateral focus.

While the Anglo-Saxonic model of monist approach believed in creating value for the shareholder and hence is shareholder-centric, the Germano-Nippon corporations on the other hand, followed the pluralistic approach of corporate governance.2 They recognized that entities other than the resource suppliers held a stake in the economic functioning of corporations. Hence, central to their approach was the creation of value to each of those entities involved with the corporation's functioning. Since the firm enters into a nexus of contracts not only with the shareholder, but with a set of multiple actors also, it is conditional upon the firm to distribute the value generated as a result of its operations amongst all the actors.3