Principal-Principal Conflicts : An Exploratory Study in Privatized Companies in an Asian Emerging Economy

Manuscript Type: EmpiricalResearch Question/Issue: This study examines the phenomenon of principal–principal conflicts in privatized companies in Vietnam. Since different types of shareholders may have competing interests, our study aims to address the following question: ‘How do different types of shareholders affect principal–principal conflicts in privatized companies in Asian emerging economies?’ Research Findings/Insights: Through a qualitative study, including 31 semi-structured interviews with various governance actors from 14 privatized companies in Vietnam, we identify four types of principal–principal conflicts: (a) state controlling owners versus non-state owners, (b) manager-owners and affiliated strategic investors versus employee-owners, (c) multiple opportunistic strategic investors versus minority employee-owners and (d) hibernating strategic investors versus other inside owners. Theoretical/Academic Implications: Our study contributes to the extant research on principal–principal conflicts in emerging economies. We advance the debate on the complexity of relationships between inside and outside shareholders. Our findings demonstrate that an understanding of controlling and minority shareholders and institutional conditions provide a more fine-grained understanding of the complexity of principal–principal conflicts. Practitioner/Policy Implications: Our findings offer insights into how different types of shareholders seek to advance their own interests. This, in turn, can lead to them misinterpreting legal requirements. Thus, policymakers should consider different types of strategic investors and their strategic intent in the privatization process.