Strategy and the “business portfolio”

In this article the author goes on to develop the conclusion reached in his previous article which appeared in the December edition of Long Range Planning. These conclusions concerned the requirements for strategic success for an individual business, here they are developed into their implications for strategy development in the typical multibusiness company.It is argued that relative competitive position and growth are the two fundamental parameters which must be considered in determining the strategy that an individual business should follow when viewed within the context of the company's overall ‘business portfolio’. The likely patterns of business strategy which will lead to overall corporate success are discussed and contrasted with those which can lead to disaster.The key is that strategies should be made to differ widely from business to business, as a function of the growth and relative competitive position of each business and the company's overall resource position particularly with respect to cash. The ‘across the board’ defensive measures which many companies have adopted in recent years as their response to the pressures of inflation and recession are therefore argued to be singularly inappropriate for the long term. The ‘business portfolio’ concept provides a superior approach for developing the differentiated strategic business objectives which are necessary for any company to make the most of its opportunities.     

Taxes and the choice between risky and risk-free debt: on the neutrality of credit default taxation

Shareholders can decide if their corporation issues risky or risk-free debt. We identify tax systems in which the choice between risky and risk-free debt is not distorted by taxes. These credit default neutral tax systems make it possible to make capital structure decisions and firm valuations neglecting credit default risk, even after taxes. Thus credit default neutrality is a characteristic of a tax system that helps to reduce planning costs. Moreover, credit default neutrality is a necessary condition for financial neutrality of taxation. We find one class of credit default neutral taxes that preserves and another class that modifies the expected tax distribution between creditors and debtor firm. Finally, we show the influence of personal taxation on credit default neutrality.

Following the Herd or Not?: Patterns of Renewal in the Netherlands and the UK

How do large firms conduct their strategic renewal journeys in an increasingly turbulent environment? Are there generic industry patterns, or are these renewal journeys country- or firm-specific? To answer these questions, we examine the relative incidence of external versus internal and explorative versus exploitative renewal actions, and their speed, in leading Dutch and UK financial service companies using longitudinal data. The context, content and process dimensions of strategic renewal are distinguished, and research questions about these attributes are formulated and investigated using new metrics. Findings show that while exploration/exploitation ratios are fairly similar for firms across the entire industry, systematic differences are evident between the external/internal renewal ratios of Dutch and UK firms, and that speed of renewal is largely determined at the firm level. Thus we find that industry-, country- and firm-specific factors all influence journeys of strategic renewal in distinctive and complementary ways.     

Can Sustainable Development and the Market Co-exist?

This article looks at Shell vision of sustainable development which is based on three essential and inseparable building blocks — the creation and maintenance of economic wealth, environmental improvement and social equity. All three must be integrated and balanced for long-term success, and all three underpin the Shell approach to global markets.The process of moving towards a sustainable future is under way, but the rate of progress depends on customer choice, innovation and investment — in other words, on market forces. If governments set targets and provide a good framework, companies like Shell will take the chances and offer solutions that support sustainable development. Then the markets will decide.Shell companies see support for sustainable development as a key element in continuing business success. This article discusses some of the ways Shell works with a wide range of partners to seek ways of achieving the best balance between economic, environmental and social considerations and between short term and long-term benefits. On this basis, the market supports the aims of sustainable development and Shell companies intend to play their part by providing, responsibly, efficiently and profitably, the energy the world's growing populations will need and want in the 21^st century.     

Risk Management and the Responsible Corporation: How Sweeping the Invisible Hand?

Although enterprise risk management (ERM) has many benefits for corporations, there has been virtually no discussion of the extent to which its practice may be said to constitute corporate social responsibility. This article presents a prima facie case for the convergence of the two and examines this case through a consideration of four possible objections or challenges. The conclusion of this article is a tempered optimism that ERM has the significant, but as yet untapped, potential to constitute socially responsible activity, which, if realized, would enable Adam Smith's invisible hand of the marketplace to have an expanded sweep.     

Does the internet change how we die and mourn? Overview and analysis

The article outlines the issues that the internet presents to death studies. Part 1 describes a range of online practices that may affect dying, the funeral, grief and memorialization, inheritance and archaeology; it also summarizes the kinds of research that have been done in these fields. Part 2 argues that these new online practices have implications for, and may be illuminated by, key concepts in death studies: the sequestration (or separation from everyday life) of death and dying, disenfranchisement of grief, private grief, social death, illness and grief narratives, continuing bonds with the dead, and the presence of the dead in society. In particular, social network sites can bring dying and grieving out of both the private and public realms and into the everyday life of social networks beyond the immediate family, and provide an audience for once private communications with the dead.     

The state and the macro-industrial economy—The use and abuse of offset

State intervention to establish, develop and retain particular industrial sectors in the world economy is widespread, often stimulated by the perceived threat to sovereignty posed by foreign based macro-industrial enterprises. The paper examines a particular form of such intervention, known as offset, which is widely used in major purchases of aerospace products. In this the State, in consideration of such a purchase from a foreign based company, requires that a proportion of the contract value be placed as work in its own related manufacturing sector. Current examples of how widespread and complex these have become are given and analysed by reference to a matrix of possible types of offset and levels of industrial development of the purchasing State. On the assumption that the efficient diffusion of appropriate industrial capabilities to all nations of the world is a desirable goal, the use and abuse of offset to this end is discussed and conclusions drawn.     

Is it the Brazilian Way? Extending the Comparison of Public and Private Organizations

This study investigates the differences in select organizational characteristics, managerial practices and work attitudes among 670 public and private sector workers in Brazil. The results indicate that in some aspects there is a moderation effect by type of organization. For example,when public employees score high on autonomy and task significance, perceive organizational practices as favourable, and keep membership in the same organization, they tend to be more satisfied than private sector workers. Overall, the findings highlight the need for more international comparisons to gain a better understanding of the public-private distinction.     

FEMA and the Witt Revolution: Testing the Hypothesis of “Bureaucratic Autonomy”

In the wake of widespread criticism for its poor performance in Hurricane Andrew in 1992, FEMA became a more effective organization under the leadership of James Witt (1993–2001). One answer to the question of how and why FEMA improved so rapidly and significantly during this period is Carpenter’s (2001) theory of “bureaucratic autonomy.” This paper defines the minimum conditions Carpenter considers necessary for the term, evaluates their applicability to FEMA during this period, and briefly examines alternative explanations for FEMA’s organizational transformation. It concludes that the innovation and entrepreneurship FEMA demonstrated during this period do indeed meet the criteria for “bureaucratic autonomy.”

Does the capital of social capital matter? Relational resources of the board and the performance of Brazilian companies

Based on theories of social capital, in this study, we seek to assess the impact of a board’s social capital on the market value of companies listed on the Brazilian stock exchange. As our indicator of social capital, we use the relational resources identified in the direct, indirect and heterogeneous ties of the board. Employing panel data from 508 observations, our results indicate that heterogeneous relational resources have a stronger and more significant influence than the resources available from board members’ direct relationships. Additionally, as the effects of board interlock are endogenously determined by several factors related to the firm level, we seek to mitigate the endogeneity problem using models of instrumental variables and simultaneous equations. Our hypotheses were consistent after controlling for endogeneity. We also check whether the board’s social capital could present a U-inverted effect on the market value. This relationship was only plausible in social capital by indirect ties. Finally, we isolate the effect of relational resources within and between industries on Tobin’s Q. There was no significant effect through interlocks within the same industry. However, ties with companies in several other industries were significant.     

Whose company is it? The concept of the corporation in Japan and the west

This article examines the differences in the concept of the corporation and their possible implications for corporate performance, between Japan on the one hand and the United States and Europe (Germany, UK and France) on the other. The Japanese concept is used as the standard against which the other models are compared. The concept of the corporation is defined here as the answer to the question: ‘In whose interest should the firm be managed?’¹ This is the foundation on which corporate governance and the monitoring system for the CEO is built. The analysis is focused on large publicly-held corporations with widely diffused ownership.     

Public or Private? Public Corporations,Companies and the Decline of the Middle Ground

In the era of New Public Management in the Anglo-Saxon countries, governments have become infatuated with things private and disparaging of things public. This dramatic attitudinal shift has been reflected in the importation of private sector business method into so much of what government does, and in the championing of privatization in its various forms as a way of reducing the size and importance of public sectors. The change represents a retreat from the more traditional acceptance that a valuable social purpose was served by middle ground structures and activities located in the outer parts of these public sectors, i.e., between the highly politicised cores of government systems and the highly commercialised institutions of private enterprise. In particular, this article argues that the form of the public (or government, statutory or crown) corporation epitomised such social value, and that the state-owned company which is now so often replacing it represents an abandoning of social value.     

3 Merger and Acquisition Transactions and Executive Compensation: A Review of the Empirical Evidence

Abstract

The purpose of this paper is to review the existing empirical evidence and provide an integrative framework for the growing body of literature that is situated at the intersection of two highly debated topics: merger and acquisition (M&A) activities and executive compensation. The proposed framework structures the literature along two dimensions, such as M&A phases and firm's role in a M&A deal, allowing us to identify three main streams of research and five different conceptualizations of causal relationships between M&A transactions and executive compensation. Making a comprehensive review of empirical studies conducted to date we aim at shedding more light on the current and emerging knowledge in this field of investigation, discussing the inconsistencies encountered within each stream of research and suggesting promising directions for further exploration.     

Children and Planning: To What Extent Does the Scottish Town Planning System Facilitate the UN Convention on the Rights of the Child?

Children are often not given explicit attention in land use planning outside of allocating space for schools, parks and playgrounds. This is problematic as children both use and navigate beyond these settings, and findings from research on and with children report how they are frequently marginalized in society. This is partly affected by the way town planning systems treat children's spatial needs and participation. Therefore, this article investigates whether and how the Scottish town planning system acknowledges children, particularly in light of the internationally recognized rights set out in the UN Convention on the Rights of the Child (UNCRC). It uses critical discourse analysis of key Scottish planning policies, along with a survey of Scotland's planning authorities to ascertain the extent to which children are provided for and participate in the system. It argues that children's rights are not widely acknowledged or incorporated into town planning policy and practice, and suggests this must be addressed to achieve greater social justice and support Scotland's commitments as a signatory of the UNCRC.     

‘Management Standards’ and work-related stress in the UK: policy background and science

In the late 1990s, the Health and Safety Commission, as the lead authority in the UK responsible for Health and Safety at Work, conducted an extensive consultation exercise to elicit views about how work-related stress should be tackled. The Commission subsequently decided that regulation was not justified and opted for an approach with four strands. One of these was to work with stakeholders to develop clear, agreed standards of good management practice. This paper describes and discusses the rationale behind a standards-based approach that is essentially based on a method of controlling hazards. The Management Standards approach uses a taxonomy of six stressors that has evolved out of extensive research carried out on behalf of the UK's Health and Safety Executive (HSE) and in conjunction with stakeholders, and a three-phase risk assessment methodology. Further developmental work on the standards (which are to be subjected to public consultation) and associated measurement tools is described in a companion paper in this issue of Work & Stress (Cousins, Mackay, Clarke, Kelly, Kelly, & McCaig, ). The emphasis is on prevention towards reducing stress in the UK working population. We review current thinking on models of work stress, consider evidence linking workplace psychosocial factors and various health and organizational outcomes, and examine the effectiveness of organizational interventions. We argue that the literature supports an approach that aims to move organizational states (represented by the current situation) to more desirable ones (represented by the six Management Standards), and that this is an effective ‘population’ based approach to tackling workplace stress and promoting individual and organizational health.     

Do leadership role occupancy and transformational leadership share the same genetic and environmental influences?

Using data collected from 107 pairs of identical and 89 pairs of fraternal female twins, this study examined the genetic and environmental associations between transformational leadership and leadership role occupancy. Results show that 78% of the covariance between the two leadership variables was attributable to overlapping genetic factors, while 22% of the covariance to overlapping environmental factors. In particular, 13% (2%) of the variance in leadership role occupancy was accounted for by the same genetic (environmental) factors related to transformational leadership. Unique sets of genetic and environmental variables, which are not associated with transformational leadership, explained 16% and 69% of the variance in leadership role occupancy, respectively. The results suggest that multiple manifestations of leadership (i.e., transformational leadership and leadership role occupancy) are differentially heritable. Although the association between these two variables is largely due to overlapping genetic rather than environmental factors, unique (i.e., non-overlapping) genetic and environmental influences still play an important role in impacting these leadership variables.     

Cui bono? Depicting the benefits of the new municipal budgeting and accounting regime in Germany

The new budgeting and accounting regime for the public sector (Doppik), which is based on private sector accounting standards, has been the subject of numerous discussions in research and practice in Germany for the last 20 years. However, those discussions were mostly characterized by assertions, unproven statements and logical arguments. The objective of this paper is to empirically analyze the perceived benefits of a reformed municipal accrual budgeting and accounting system by using a structural equation model. Our results show that improved management capabilities are an important indirect factor, whereas efficiency, intergenerational equity, and transparency are direct determinants of benefit. The consistent implementation of the new output-/outcome-oriented management rationality and the necessity of harmonizing budget laws are revealed as prerequisites for further development.     

Transformations and Legitimacy in Nonprofit Organizations—The Case of Amnesty International and the Brutalization Thesis

This paper looks at organizational change in voluntary nonprofit organizations. Their 'purposive' nature makes voluntary organizations difficult to change while their tendency to oligarchic control results in this change often being imposed from the top. Amnesty International's death penalty work demonstrates the complexity of organizational change, as well as the accountability for and the legitimacy of change in nonprofits. Legitimacy should not be equated with organizational strength, and will remain subject to shifting, contested social norms concerning standards of behavior.