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Notes
L. Hannah, ‘Marshall's “Trees” and the Global “Forest”: Were “Giant Redwoods” Different?’, in N. Lamoreaux, D. Raff and P. Temin (eds), Learning by Doing in Markets, Firms and Countries (Chicago, 1999).
S. Toms and M. Wright, ‘Corporate Governance, Strategy and Structure in British Business History, 1950–2000’, Business History, Vol.44 (2002), pp.91–124; J.S. Toms and J.F. Wilson, ‘Scale, Scope and Accountability: Towards A New Paradigm of British Business History’, Business History, Vol.45 (2003), pp.1–23. For historical applications to entrepreneurship and network structure, see, respectively, J.S. Toms, ‘Accounting for Entrepreneurship: A Knowledge Based View of the Firm’, Critical Perspectives in Accounting (forthcoming); J.S. Toms and I. Filatotchev, ‘Corporate Governance, Business Strategy and the Dynamics of Networks: A Theoretical Model and Application to the British Cotton Industry, 1830–1980’, Organization Studies (forthcoming).
M. Wright, K. Robbie, B. Chiplin and M. Albrighton, ‘The Development of an Organisational Innovation: Management Buy-outs in the UK, 1980–97’, Business History, Vol.42 (2000), pp.137–84.
A. Chandler, The Visible Hand (Cambridge, MA, 1990); W. Lazonick, Business Organisation and the Myth of the Market Economy (Cambridge, 1991); A. Chandler, Scale and Scope (Cambridge, MA, 1990); D. Channon, The Strategy and Structure of British Enterprise (London, 1973); B. Elbaum and W. Lazonick (eds), The Decline of the British Economy (Oxford, 1986).
C. Sabel and J. Zeitlin, World of Possibilities: Flexibility and Mass Production in Western Industrialisation (Cambridge, 1997), p.33.
Wright et al., ‘Development of an Organisational Innovation’.
S.N. Broadberry and N.F.R. Crafts, ‘British Economic Policy and Industrial Performance in the Early Post-war Period’, Business History, Vol.38 (1996), pp.65–91; S. Broadberry, The Productivity Race: British Manufacturing in International Perspective, 1850–1990 (Cambridge, 1997).
The multi-divisional form, as defined by A. Chandler, Strategy and Structure (Cambridge, MA, 1962), or as the M-Form (O. Williamson, ‘Managerial Discretion, Organisational Form and the Multi-Divisional Hypothesis’, in R. Harris and A. Woods (eds), The Corporate Economy (London, 1971), p.382), possesses certain key features: centralised control over strategic decision making investment in new products and markets and delegation of operational decision making to divisions monitored as profit centres. In this article, where these features are present the term ‘multi-divisional’ is used.
N.F.R. Crafts, ‘Reversing Relative Economic Decline? The 1980s in Historical Perspective’, Oxford Review of Economic Policy, Vol.7 (1991), pp.81–98.
J.B. Barney, Gaining and Sustaining Competitive Advantage (New York, 1997).
E. Penrose, The Theory of the Growth of the Firm (Oxford, 1959); D. Teece, ‘Economies of Scope and the Scope of the Enterprise’, Journal of Economic Behaviour and Organisation, Vol.1 (1980), pp.223–47; J.B. Barney, ‘Firm Resources and Sustained Competitive Advantage’, Journal of Management, Vol.17 (1991), pp.99–120.
C. Markides, and P.J. Williamson, ‘Related Diversification, Core Competences and Corporate Performance’, Strategic Management Journal, Vol.15 Special Issue (1994), pp.149–65.
M. Piore and C. Sabel, The Second Industrial Divide (New York, 1984).
Originally described by Alfred Marshall; see A. Marshall, Principles of Economics (London, 1890); M. Kamien, E. Mueller and I. Zang, ‘Research, Joint Ventures and R&D Cartels’, American Economic Review, Vol.82 (1992), pp.1293–306; C. Oughton and G. Whittam, ‘Competition and Co-operation in the Small Firm Sector’, Scottish Journal of Political Economy, Vol.44 (1997), p.6.
As suggested elsewhere as part of a developing research agenda. J. Barney, M. Wright and D. Ketchen, ‘The Resource-Based View of the Firm: Ten Years After 1991’, Journal of Management, Vol.27 (2001), pp.625–41; B. Kogut, ‘Joint Ventures: Theoretical and Empirical Perspectives’, Strategic Management Journal, Vol.1 (1988), pp.217–37.
S. Grossman and O. Hart, ‘Takeover Bids, the Free Rider Problem and the Theory of the Corporation’, Bell Journal of Economics, Vol.11 (1979), pp.42–64.
C.W.L. Hill and T.M. Jones, ‘Stakeholder-Agency Theory’, Journal of Management Studies, Vol.29 (1992), pp.131–54.
Chandler, Scale and Scope; D. Palmer, P. Jennings and M. Powers, ‘The Economics and Politics of Structure: The Multi-Divisional Form and the Large US Corporation’, Administrative Science Quarterly, Vol.32 (1987), pp.25–87; J. Mahoney, ‘The Adoption of the Multi-Divisional Form of Organisation: A Contingency Model’, Journal of Management Studies, Vol.29 (1992), pp.42–72.
R.E. Hoskisson, R.A. Johnson and D. Moesel, ‘Corporate Divestiture Intensity in Restructuring Firms: Effects of Governance, Strategy and Performance’, Academy of Management Journal, Vol.37 (1994), pp.1207–51; R.A. Johnson, ‘Antecedents and Outcomes of Corporate Refocusing’, Journal of Management, Vol.22 (1996), pp.439–83; S. Zahra and J. Pearce, ‘Boards of Directors and Corporate Financial Performance: A Review and Integrative Model’, Journal of Management, Vol.15 (1989), pp.291–334.
D. Gordon, R. Edwards and M. Reich, Segmented Work, Divided Workers (Cambridge, MA, 1982); D. Gordon, Fat and Mean: The Corporate Squeeze of Working Americans and the Myth of Managerial Downsizing (New York, 1996).
M. Wright, R. Hoskisson, L Busenitz and J. Dial, ‘Entrepreneurial Growth through Privatization: The Upside of Management Buyouts’, Academy of Management Review, Vol.25 (2000), pp.591–601.
Toms and Filatotchev, ‘Corporate Governance’.
R. Castanias and C. Helfat, ‘The Managerial Rents Model: Theory and Empirical Analysis’, Journal of Management, Vol.27 (2001), pp. 661–78.
Note that the need for comparative data means that the information presented on UK buy-outs and buy-ins in and in this article relate only to public to private and divestment cases. In contrast, the data on buy-outs and buy-ins in S. Toms and M. Wright, ‘Corporate Governance, Strategy and Structure’, relate to all types of buy-outs and buy-ins in the UK.
For a review, see R. Whittington and M. Mayer, The European Corporation (Oxford, 2000), chapter 2.
This discussion uses the received notion of the American model. It is not intended that the US economy should be treated in a homogeneous fashion. For example, the Silicon Valley ‘west coast’ model utilising external economies of scale-based networking using flexible specialisation was successfully developed in the 1930–70 period. C. Lecuyer, ‘Making Silicon Valley: Engineering Culture, Innovation and Industrial Growth, 1930–1970’, Enterprise and Society, Vol.2 (2001), pp.666–72.
R.T. Averitt, The Dual Economy (New York, 1968).
Chandler, Scale and Scope.
N. Tiratsoo and J. Tomlinson, ‘Exporting the Gospel of Productivity: United States Technical Assistance and British Industry, 1945–1960’, Business History Review, Vol.71 (Spring 1977), pp.44–5.
Broadberry and Crafts, ‘British Economic Policy’; S. Broadberry, The Productivity Race: British Manufacturing in International Perspective, 1850–1990 (Cambridge, 1997).
P. Armstrong, ‘The Rise of Accounting Controls in British Capitalist Enterprises’, Accounting, Organisations and Society, Vol.12 (1987), pp.415–36; S. Young and A.V. Lowe, Intervention in the Mixed Economy (London, 1974), p.74.
B. Kogut and D. Parkinson, ‘The Diffusion of American Organising Principles in Europe’, in B. Kogut (ed.), Country Competitiveness (New York, 1993).
D. Swann, D.P. O'Brien, W.P.J. Maunders and W.S. Howe, Competition in British Industry: Restrictive Practices Legislation in Theory and Practice (London, 1974).
D.P. O'Brien and D. Swann, Information Agreements, Competition and Efficiency (London, 1968).
D.P. O'Brien, W.S. Howe, M. Wright and R. O'Brien, Competition Policy, Profitability and Growth (London, 1979).
N. Fligstein, The Transformation of Corporate Control (Cambridge, MA 1990).
G. Davis, K. Diekmann and C. Tinsley, ‘The Decline and Fall of the Conglomerate Firm in the 1980s: The Deinstitutionalisation of an Organisational Form’, American Sociological Review, Vol.59 (1994), pp.547–70.
D. Ravenscraft and F. Scherer, Mergers, Sell Offs and Economic Efficiency (Washington, DC, 1987), chapter 6; Chandler, Scale and Scope, pp.622–3.
Hannah, ‘Marshall's “Trees”’.
Tiratsoo and Tomlinson, ‘Exporting the Gospel of Productivity’, p.67.
For a summary of leading examples and statistics, see Toms and Wilson, ‘Scale, Scope and Accountability’. Also see P. Hart and R. Clarke, Concentration in British Industry (Cambridge, 1980); M. Utton, The Political Economy of Big Business (London, 1982); Hannah, Rise of the Corporate Economy, p.126.
Channon, Strategy and Structure of British Enterprise, p.67; Hannah, Rise of the Corporate Economy, p.174.
G. Jones, The Evolution of International Business (London, 1998).
J. Zeitlin, ‘Reconciling Automation and Flexibility? Technology and Production in the Post-War British Motor Vehicle Industry’, Enterprise and Society, Vol.1 (2000), pp.9–62.
Board of Trade, Working Party Reports: Cotton (London, 1946), pp.242–9.
Engineering, 8 June 1956.
J.R. Edwards, T. Boyns and M. Matthews, ‘Standard Costing and Budgetary Control in the British Iron and Steel Industry: A Study of Accounting Change’, Accounting, Auditing & Accountability Journal, Vol.15 (2002), pp.12–45.
Chandler, Scale and Scope; W. Lazonick and M. O'Sullivan, ‘Finance and Industrial Development. Part 1: The United States and the United Kingdom’, Financial History Review, Vol.4 (1997), p.16.
Toms, ‘Accounting for Entrepreneurship’, argues consistently with that performance can be used to explain the characteristics of entrepreneurship.
Chandler, Scale and Scope.
N. Fligstein, ‘The Spread of the Multidivisional Form among Large Firms, 1919–1979’, American Sociological Review, Vol.50 (1985), pp.377–91.
Channon, Strategy and Structure of British Enterprise.
R. Fitzgerald, ‘The Competitive and Institutional Advantages of Holding Companies: British Businesses in the Inter-War Period’, Journal of Industrial History, Vol.3 (2000), pp.1–30.
Channon, Strategy and Structure, p.239.
M. Goold, A. Campbell and M. Alexander. Corporate-Level Strategy: Creating Value in the Multibusiness Company (New York, 1994), p.54.
Tiratsoo and Tomlinson, ‘Exporting the Gospel of Productivity’, p.73.
Armstrong, ‘The Rise of Accounting Controls’, p.415.
Armstrong, ‘The Rise of Accounting Controls’. Investment appraisal techniques such as Discounted Cash Flow were not used anywhere in the UK economy until the mid-1960s, when they rapidly became established. This was partly due to A.M. Alfred of Courtaulds, who did much to pioneer the technique. A.M. Alfred, ‘Investment in the Development Districts of the United Kingdom and Discounted Cash Flow’, Journal of Accounting Research, Vol.2 (1964), pp.174–82.
O.E. Williamson, Markets and Hierarchies (New York, 1975).
Toms and Wilson, ‘Scale, Scope and Accountability’; Armstrong, ‘The Rise of Accounting Controls’; S. Young and A.V. Lowe, Intervention in the Mixed Economy (London, 1974), p.74.
K. Williams, T. Williams and D. Thomas, Why are the British Bad at Manufacturing? (Henley, 1983).
S. Aris, Arnold Weinstock and the Making of GEC (London, 1998).
Ravenscraft and Scherer, Mergers, Sell Offs and Economic Efficiency.
H. Levy and M. Sarnat, ‘Diversification, Portfolio Analysis and The Uneasy Case for Conglomerate Mergers’, Journal of Finance, Vol.25 (1970), pp.795–802; R. Rumelt, Strategy, Structure and Economic Performance (Boston, 1974).
A.W. Sametz, ‘An Expanded Role for Private Pensions in US Corporate Governance’, Journal of Applied Corporate Finance, Vol.8 (1995), pp.97–110.
Chandler, Scale and Scope, p.625.
J. Cassidy, Dot Con (London, 2002). Tax relief on Individual Retirement Accounts was introduced in 1978 and extended to all income under 401(k) plans.
Sametz, ‘An Expanded Role for Private Pensions’.
Chandler, Scale and Scope, p.625.
J. Scott, Corporate Businesses and Capitalist Classes (Oxford, 1997), p.86.
S. Bowden, ‘Ownership Responsibilities and Corporate Governance: The Crisis at Rolls Royce 1968–71’, Business History, Vol.42 (2002), pp.31–62.
D. Higgins and J.S. Toms, ‘Public Subsidy and Private Divestment: The Lancashire Cotton Textile Industry, c.1950–c.1965’, Business History, Vol.42 (2000), pp.59–84.
J. Maltby, ‘Was the 1947 Companies Act a Response to a National Crisis?’, Accounting History, Vol.5 (2000), pp.31–60.
Companies Acts, 1967 and 1976; Jenkins Report (1962), Cmnd. 1749; White Paper on Company Law Reform (1973), Cmnd. 5391.
R. Roberts, ‘Regulatory Response to the Rise of the Market for Corporate Control in Britain in the 1950s’, Business History, Vol.34 (1992), pp.183–200; J. Littlewood, The Stock Market (London, 1998), p.103.
Toms and Wright, ‘Corporate Governance, Strategy and Structure’.
M. Blair, Ownership and Control: Rethinking the Corporation for the Twenty-First Century (Washington, DC, 1995).
H. Servaes, ‘The Value of Diversification during the Conglomerate Merger Wave’, Journal of Finance, Vol.51 (1996), pp.1201–55; H.H. Shin and R.M. Stultz, ‘Are Internal Capital Markets Efficient?’, Quarterly Journal of Economics, Vol.113 (1998), pp.531–53; R. Rajan, H. Servaes and L. Zingales, ‘The Cost of Diversity: The Diversification Discount and Inefficient Investment, Journal of Finance, Vol.55 (2000), pp.35–80; D.J. Denis, D.K. Denis and A. Sarin, ‘Agency Problems, Equity Ownership, and Corporate Diversification’, Journal of Finance, Vol.52 (1997), pp.135–60. D.J. Denis, D.K. Denis and K. Yost, ‘Global Diversification, Industrial Diversification, and Firm Value’, Journal of Finance, Vol.57 (2002), pp.1951–79.
National Association of Pension Funds, Report of the Committee of Inquiry into UK Vote Execution (2000).
Even before the changes in deregulation, London had relatively relaxed entry requirements for foreign banks. H. Rose, ‘London as an International Financial Centre: A Narrative History’, in London Business School, The City Research Project, Subject Report XIII (London, 1994); M. Reid, All-Change in the City: The Revolution in Britain's Financial Sector (London, 1988); P. Augar, The Death of Gentlemanly Capitalism (London, 2000).
Wright et al., ‘Entrepreneurial Growth through Privatization’, p.598.
A. Kaufman and E. Englander, ‘Kohlberg, Kravis Roberts & Co and the Restructuring of American Capitalism’, Business History Review, Vol.67 (Spring 1993), pp.52–97. These deals generally began as friendly deals but later transactions involved hostile LBOs. See also G. Baker and G. Smith, The New Financial Capitalists: Kohlberg, Kravis and Roberts and the Creation of Corporate Value (Cambridge, 1998).
Mergerstat Review.
Centre for Management Buy-out Research.
R.A. Taggart, ‘The Growth of the Junk Bond Market in its Role in Financing Takeovers’, in A Auerbach (ed.), Mergers and Acquisitions (Chicago, 1988).
P. Coggan, The Money Machine (London, 1996).
A. Dicker, ‘Tax Issues’, in B. De Caires (ed.), Corporate Restructuring (London, 1990).
Coggan, The Money Machine.
M. Wright, S. Thompson, B. Chiplin and K. Robbie, Buy-ins and Buy-outs: New Strategies in Corporate Management (London, 1991).
Centre for Management Buy-out Research, ‘Management Buy-outs: Quarterly Review’ (Autumn 2001), p.78.
The main exceptions in the UK were the hostile LBO bid for BAT Industries in 1989, which was predicated on divesting under-performing assets. The incumbent management reacted to the bid by divesting assets as a defence. Although the bid thus subsequently lapsed, it had an important effect in pressurising management to exit certain businesses that would not otherwise have happened so speedily, if at all. The successful hostile LBO of Gateway in 1989 was accompanied by a significant divestment of unwanted stores and divisions. These cases very much represented a brief emergence of US behaviour in the UK. M. Wright, N Wilson, K. Robbie and C. Ennew, ‘Restructuring and Failure in Buy-outs and Buy-ins’, Business Strategy Review, Vol.5 (1994), pp.21–40.
Oughton and Whittam, ‘Competition and Co-operation’.
Censuses of Production, Summary Tables. For a more detailed analysis, see Toms and Wright, ‘Corporate Governance, Strategy and Structure’.
Oughton and Whittam, ‘Competition and Co-operation’, p.27.
Business Week, ‘The Age of Consolidation’, 14 Oct. 1991; ‘Making the Perfect Connection’, Wordperfect Report (Summer/Fall 1994), p.2.
G. Murray and J. Lott, ‘Have UK Venture Capitalists a Bias against Investment in New Technology Firms?’ Research Policy, Vol.24 (1995), pp.283–99. For evidence that UK venture capitalists had become somewhat more positive towards early-stage new technology investments see A. Lockett, G. Murray and M. Wright, ‘Do UK Venture Capitalists Still Have a Bias against Investment in New Technology Firms?’ Research Policy, Vol.31 (2002), pp.1009–30.
R. Coopey, 3i: Fifty Years of Investing in Industry(Oxford, 1995); idem, ‘The First Venture Capitalist: Financing Development after 1945, The Case of ICFC/3I’, Business and Economic History, Vol.23 No.1 (1994), pp.262–72; Wright et al., ‘The Development of an Organisational Innovation’.
Wright et al., ‘The Development of an Organisational Innovation’.
For a summary of statements to the hearings by various ‘disinterested parties’ (academic economists and regulators), see M. Murray, ‘Selections from the Senate and House Hearings on LBOs and Corporate Debt’, Journal of Applied Corporate Finance, Vol.2 (1989), pp.30–63.
M. Wright, B. Chiplin, S. Thompson and K. Robbie, ‘Management Buy-outs, Trade Unions and Employee Ownership’, Industrial Relations Journal, Vol.21 (1990), pp.137–46.
M. Wright, S. Thompson, B. Chiplin and K. Robbie, Buy-ins and Buy-outs: New Strategies in Corporate Management (London, 1991), chapter 3.
H. Prechel, Big Business and the State (New York, 2000), p.129.
M. Zey, Banking on Drexel, Junk bonds and Buyouts (New York, 1993); idem, ‘The Transformation of Corporate Control to Owners and Form to the Multi-Subsidiary, 1981–1993’, Research in Organizational Change and Development, Vol.11 (1998), pp.271–312; idem, ‘The Subsidiarization of the Securities Industry and the Organisation of Securities Fraud Networks to Return Profits in the 1980s’, Work and Occupations, Vol.26 (1999), pp.50–76.
Zey, ‘The Transformation of Corporate Control’; M. Zey and B. Camp, ‘The Transformation from Multi Divisional to Corporate Groups of Subsidiaries: Capital Crisis Theory’, Sociological Quarterly, Vol.37 (1996), pp.327–51.
M. Zey and T. Swenson, ‘The Transformation and Survival of Fortune 500 Industrial Corporations through Mergers and Acquisitions, 1981–1995’, Sociological Quarterly, Vol.42 (2001), pp.461–86.
D. Wise and M. Zey, ‘The Convergence of Production and Financial Organisations: KKRs Integration of Corporate Control for Continued Profits in the 1990s’, Social Science Quarterly, Vol.80 (1999), pp.487–503.
Zey, Banking on Drexel; Zey and Camp, ‘The Transformation from Multi Divisional to Corporate Groups of Subsidiaries’; M. Zey and T. Swenson, ‘Corporate Tax Laws, Corporate Restructuring and Subsidiarization of Corporate Form, 1981–1995’, Sociological Quarterly, Vol.39 (1998), pp.555–81; M. Zey and T. Swenson, ‘The Transformation of the Dominant Corporate Form from Multi-divisional to Multi subsidiary: The Role of the Tax Reform Act’, Sociological Quarterly, Vol.40 (1999), pp.241–67.
M. Sterling and M. Wright, Management Buyouts and the Law (Oxford, 1990).
M. Wright and J. Coyne, Management Buyouts (Beckenham, 1985); Wright et al., Buy-ins and Buy-outs.
US buy-outs in the early 1980s were accused of involving cosy deals with management. L. Lowenstein, ‘Management Buy-outs’, Columbia Law Review (May 1985), pp.730–84.
The Delaware Supreme Court ruled in the case of Revlon Inc versus MacAndrews & Forbes Holdings Inc that once sale becomes inevitable, directors should no longer be see their role as ‘defenders of the corporate bastion’ but as ‘auctioneers charged with getting the best price for the stockholders’. D. Ridl, ‘Buy-outs in the United States’, in G. Sharp (ed.), The Management Buy-out Manual (London, 1993). Sterling and Wright suggest that the position is less clear in the UK, but that directors have a duty not to mislead shareholders, to provide sufficient information and advice to enable shareholders to reach a properly informed decision and not to exercise fiduciary power in a way which would prevent or inhibit shareholders from accepting the best competing offer (p.137).
Kaufman and Englander, ‘Kohlberg, Kravis Roberts’, p.82.
Chandler, Scale and Scope, p.624; W.T. Grimm, Mergerstat Review (Chicago, 1987), pp.103–4; Lazonick and O'Sullivan, ‘Finance and Industrial Development: Part 1’, p.17; Merrill Lynch Advisory Services, Mergerstat Review (New York, 1994), p.120.
Ravenscraft and Scherer, Mergers, Sell Offs and Economic Efficiency, p.190.
Toms and Wright, ‘Corporate Governance, Strategy and Structure’.
L. Rosenthal and T. Sullivan, ‘Some Estimates of the Impact of Corporate Diversification on the Valuation and Leverage of USA Firms: Estimates from 1972 Data’, Journal of Business, Finance and Accounting, Vol.12 (1985), pp.275–85.
See R. Rajan, H. Servaes and L. Zingales, ‘The Cost of Diversity: The Diversification Discount and Inefficient Investment’, Journal of Finance, Vol.55 (2000), pp.35–80; L. Lang and R. Stulz, ‘Tobin's q, Corporate Diversification and Firm Performance’, Journal of Political Economy, Vol.102 (1994), pp.1248–80; P. Berger and E. Ofek, ‘Bust-up Takeovers of Value Destroying Diversified Firms’, Journal of Finance, Vol.51 (1996), pp.1175–200; K. Lins and H. Servaes, ‘International Evidence on the Value of Corporate Diversification’, Journal of Finance, Vol.54 (1999), pp.2215–39.
Lins and Servaes, ‘International Evidence’.
Lins and Servaes, ‘The Value of Diversification’. Although it should be pointed out that recent evidence suggests that many studies have identified conglomerate discounts by mis-specification of subsidiary benchmarks. J. Graham, M. Lemmon and J. Wolf, ‘Does Corporate Diversification Destroy Value?’, Journal of Finance, Vol.57 No.2 (2002), p.695.
Lins and Servaes, ‘International Evidence ‘.
M. Conyon, S. Girma, S. Thompson and P. Wright, ‘The Impact of Mergers and Acquisitions on Company Employment in the UK’, European Economic Review, Vol.46 (2004), pp.31–49. This change in performance evidence relating to diversifying acquirers compared to evidence from the pre-1980 period suggests that such firms moved beyond a situation where diversifying acquisitions could be accommodated efficiently within a divisionalised structure, effectively becoming over-diversified.
G. Davis, K. Diekmann and C. Tinsley, ‘The Decline and Fall of the Conglomerate Firm in the 1980s: The Deinstitutionalization of an Organizational Form’, American Sociological Review, Vol.59 (1994), pp.547–70.
R. Whittington, M. Mayer and F. Curto, ‘Chandlerism in Post-War Europe: Strategic and Structural Change in France, Germany and the UK, 1950–1993’, Industrial and Corporate Change, Vol.8 (1999), pp.519–55.
M. Haynes, S. Thompson and M. Wright, ‘The Determinants of Corporate Divestment in the UK’, International Journal of Industrial Organisation, Vol.18 (2000), pp.1201–22.
B. Hall, ‘Corporate Restructuring and Investment Horizons in the United States, 1976–1987’, Business History Review, Vol.68 (Spring 1994), pp.110–43.
Based on 143 of the top 500 manufacturing companies in the UK for which data were available. Haynes et al., ‘Determinants of Corporate Divestment’.
M. Wright and S. Thompson, ‘Vertical Disintegration and the Life-cycle of Firms and Industries’, Managerial and Decision Economics, Vol.7 (1986), pp.141–4.
Haynes et al., ‘The Determinants of Corporate Divestment’.
See M. Wright, B. Chiplin and S. Thompson, ‘The Market for Corporate Control: Divestments and Buy-outs’, in M. Bishop and J. Kay (eds), European Mergers and Merger Policy (Oxford, 1993) for a review.
C. Markides, ‘Consequences of Corporate Refocusing: Ex Ante Evidence’, Academy of Management Journal, Vol.35 (1992), pp.398–412; K. John and E. Ofek, ‘Asset Sales and Increase in Focus’, Journal of Financial Economics, Vol.37 (1995), pp.105–26.
K.A. Afshar, R.J. Taffler and P.S. Sudarsanam, ‘The Effects of Corporate Divestment on Shareholder Wealth: The UK Experience’, Journal of Banking and Finance, Vol.16 (1992), pp.115–35.
B. Saadouni, R. Briston, C. Mallin and K. Robbie, ‘Security Price Reaction to Divestments by Healthy and Financially Distressed Firms: The Case of MBOs’, Applied Financial Economics, Vol.6 (1996), pp.85–90. These findings are in contrast to US evidence.
M. Haynes, S. Thompson and M. Wright, ‘The Impact of Divestment on Firm Performance: Empirical Evidence from a Panel of UK Companies’, Journal of Industrial Economics, Vol.50 (2002), pp.173–96. These findings are consistent with US studies using cross-section data (C. Markides, Diversification, Refocusing and Economic Performance (Cambridge, 1995)), but have the advantage of taking into account the effects of corporate restructuring programmes spread over a period of time.
F. Lichtenberg and D. Siegel, ‘The Effects of Leveraged Buyouts on Productivity and Related Aspects of Firm Behavior’, Journal of Financial Economics, Vol.27 (1990), pp.165–94.
S. Bhagat, A. Shleifer and R. Vishny, ‘Hostile Takeovers in the 1980s: The Return to Corporate Specialization’, Brookings Papers on Economic Activity: Microeconomics (1990), pp.1–72.
M. Jensen, ‘The Agency Cost of Free Cash Flow, Corporate Finance and Takeovers’, American Economic Review, Vol.76 (1986), pp.323–29.
R. Harris, D. Siegel and M. Wright, ‘Assessing the Impact of Management Buyouts on Economic Efficiency: Plant-Level Evidence from the United Kingdom’, paper presented at the North American Productivity Workshop at Union College, Schenechtady, New York, 20–22 June 2002.
For the US, see, for example, P. Phan and C. Hill, ‘Organizational Restructuring and Economic Performance in Leveraged Buyouts: An Ex Post Study’, Academy of Management Journal, Vol.38 (1995), pp.704–40.
Lazonick and O'Sullivan, ‘Finance and Industrial Development’, p.29.
H. Short, K. Keasey, M. Wright and A. Hull, ‘Corporate Governance: From Accountability to Enterprise’, Accounting and Business Research, Vol.29 (1999), pp.337–52; M. Ezzamel and R. Watson, ‘Market Comparison Earnings and the Bidding-up of Executive Cash Compensation: Evidence from the United Kingdom’, Academy of Management Journal, Vol.41 (1998), pp.221–32.
J. Barney, M. Wright and D. Ketchen, ‘The Resource-based View of the Firm: Ten Years After 1991’, Journal of Management, Vol.27 (2001), pp.625–42.
Wright et al., Management Buy-ins and Buy-outs; R. Coff, ‘When Competitive Advantage Doesn't Lead to Performance: The Resource-based View and Stakeholder Bargaining Power’, Organization Science, Vol.10 (1999), pp.119–33; R. Castanias and C. Helfat, ‘The Managerial Rents Model: Theory and Empirical Analysis’, Journal of Management, Vol.27 (2001), pp.661–78.
M. Wright, R. Hoskisson and L. Busenitz, ‘Firm Rebirth: Management Buy-outs and Wealth Creation’, Academy of Management Executive, Vol.15 (2001), pp.111–25.
Principally the Treadway (known as the Report of the National Commission of Fraudulent Financial Reporting) and Committee of Sponsoring Organizations (COSO) Reports.
Short et al., ‘Corporate Governance: From Accountability to Enterprise’; I. Demirag, S. Sudarsanam and M. Wright, ‘Corporate Governance: Overview and Research Agenda’, British Accounting Review, Vol.32 (2000), pp.341–54; M. Maclean, ‘Corporate Governance in France and the UK: Long-Term Perspectives on Contemporary Institutional Arrangements’, Business History, Vol.41 (1999), pp.88–116.
Kaufman and Englander, ‘Kohlberg, Kravis Roberts’.
Subsequent developments in US corporate governance have been encompassed in statement by the California State Pension funds (Calpers), the US Council of Institutional Investors Policies on Corporate Governance and the TIAA-CREFF Policy Statement on Corporate Governance.
For a discussion, see the special issue of Hume Papers on Public Policy on Corporate Governance and the Reform of Company Law, Vol.8 (2000).
Short et al., ‘Corporate Governance: From Accountability to Enterprise’.
C. Nobes, ‘Financial Reporting in the USA: Why and How It Differs’, Management Accounting, Vol.65 (May 1987), pp.16–17. Executives exploiting strict rules about the definition of subsidiaries to facilitate off balance sheet transactions have accentuated recent corporate scandals in the US.
M. Jensen, ‘The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems’, Journal of Finance, Vol.48 (1993), pp.831–80; M.E. Porter, ‘Capital Disadvantage: America's Failing Capital Investment System’, Harvard Business Review, Vol.70 (1992), pp.65–83.