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

Research Question/IssueThis 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/InsightsThrough a qualitative study, including 31 semistructured interviews with various governance actors from 14 privatized companies in Vietnam, we identify four types of principal–principal conflicts: (a) state controlling owners versus nonstate 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 ImplicationsOur 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 provides a more fine-grained understanding of the complexity of principal–principal conflicts.Practitioner/Policy ImplicationsOur 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.Full paper available at https://doi-org.ezproxy.auckland.ac.nz/10.1111/corg.12415