IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/38627.html
   My bibliography  Save this paper

Corporate strategy and national institutions: the case of the man-made fibres industry

Author

Listed:
  • Owen, Geoffrey

Abstract

This article discusses the impact of national policies and institutions on the strategies that companies adopt when they are faced with disruptive changes in their external environment. The article focuses on the man-made fibres industry in the U.S., Western Europe and Japan between 1980 and 2010 and describes the different ways in which the leading fibre manufacturers in those regions responded to the shift in textile, clothing and later fibre production to low-cost countries, principally in Asia. These companies had to decide whether they could continue to compete profitably in the man-made fibres industry, and, if not, what non-fibre businesses they should invest in. In countries such as the U.S. and the UK, where capital markets are powerful and companies are under pressure to enhance shareholder value, virtually all the former leaders have withdrawn from the industry and a set of new entrants, including private equity firms, have taken their place. In Japan, by contrast, leading companies such as Toray and Teijin remain committed to man-made fibres, although they have also diversified in other directions. Despite the increasing role of Anglo-American investors in Japan, Japanese companies see themselves as responsible to a broad range of stakeholders, not just to shareholders; the continuity of the enterprise and of employment is given a higher priority than in the U.S. or the UK. In Continental Europe, the restructuring of the man-made fibres industry has involved numerous divestments and demergers, and this partly reflects the growing influence of Anglo-American investors, but in some of these countries the stakeholder view of the enterprise continues to carry considerable weight. Lenzing in Austria, which is now the largest European man-made fibre manufacturer, is an example of a company which has combined commercial success with a strong sense of responsibility to the region where its main factory is based. In reviewing these different strategies the article shows how Japanese-style “long-termism” can be a source of strength in certain industries such as carbon fibre, but has the disadvantage of allowing companies to persist for too long with low-return businesses which might do a better under different owners. Some further movement towards the Anglo-American model is likely in Japan and in Continental Europe, but these countries have a different view of what companies are for, and this will continue to affect how their companies respond to industrial change.

Suggested Citation

  • Owen, Geoffrey, 2011. "Corporate strategy and national institutions: the case of the man-made fibres industry," LSE Research Online Documents on Economics 38627, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:38627
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/38627/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dore, Ronald, 2000. "Stock Market Capitalism: Welfare Capitalism: Japan and Germany versus the Anglo-Saxons," OUP Catalogue, Oxford University Press, number 9780199240616.
    2. Owen, Geoffrey, 2010. "The Rise and Fall of Great Companies: Courtaulds and the Reshaping of the Man-Made Fibres Industry," OUP Catalogue, Oxford University Press, number 9780199592890.
    3. Marco Becht & Fabrizio Barca, 2001. "The control of corporate Europe," ULB Institutional Repository 2013/13302, ULB -- Universite Libre de Bruxelles.
    4. Michel Bauer & Elie Cohen, 1985. "Les Grandes manoeuvres industrielles," Post-Print hal-03567135, HAL.
    5. Jonas Scherner, 2008. "The beginnings of Nazi autarky policy: the ‘National Pulp Programme’ and the origin of regional staple fibre plants1," Economic History Review, Economic History Society, vol. 61(4), pages 867-895, November.
    6. Ozawa, Terutomo, 1980. "Government Control over Technology Acquisition and Firms' Entry into New Sectors: The Experience of Japan's Synthetic-Fibre Industry," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 4(2), pages 133-146, June.
    7. Caroline Fohlin, 2005. "The History of Corporate Ownership and Control in Germany," NBER Chapters, in: A History of Corporate Governance around the World: Family Business Groups to Professional Managers, pages 223-282, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Owen Geoffrey, 2011. "Corporate Strategy and National Institutions: The Case of the Man-Made Fibres Industry," Capitalism and Society, De Gruyter, vol. 6(1), pages 1-59, August.
    2. Fogel, Kathy S. & Lee, Kevin K. & Lee, Wayne Y. & Palmberg, Johanna, 2013. "Foreign Investors as Change Agents: The Swedish Firm Experience," Working Paper Series in Economics and Institutions of Innovation 311, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    3. Randall Morck & Lloyd Steier, 2005. "The Global History of Corporate Governance: An Introduction," NBER Chapters, in: A History of Corporate Governance around the World: Family Business Groups to Professional Managers, pages 1-64, National Bureau of Economic Research, Inc.
    4. Schmid, Thomas & Ampenberger, Markus & Kaserer, Christoph & Achleitner, Ann-Kristin, 2010. "Controlling shareholders and payout policy: do founding families have a special 'taste for dividends'?," CEFS Working Paper Series 2010-01, Technische Universität München (TUM), Center for Entrepreneurial and Financial Studies (CEFS).
    5. Vitols, Sigurt, 2003. "Negotiated shareholder value: The German version of an Anglo-American practice," Discussion Papers, Research Unit: Institutions, States, Markets SP II 2003-25, WZB Berlin Social Science Center.
    6. Gordon L Clark & Dariusz Wójcik, 2005. "Path Dependence and Financial Markets: The Economic Geography of the German Model, 1997–2003," Environment and Planning A, , vol. 37(10), pages 1769-1791, October.
    7. Claessens, Stijn & Yurtoglu, B. Burcin, 2013. "Corporate governance in emerging markets: A survey," Emerging Markets Review, Elsevier, vol. 15(C), pages 1-33.
    8. Randall Morck & Bernard Yeung, 2009. "Never Waste a Good Crisis: An Historical Perspective on Comparative Corporate Governance," Annual Review of Financial Economics, Annual Reviews, vol. 1(1), pages 145-179, November.
    9. Dariusz Wójcik, 2003. "Change in the German Model of Corporate Governance: Evidence from Blockholdings 1997–2001," Environment and Planning A, , vol. 35(8), pages 1431-1458, August.
    10. Yoser Gadhoum, 2006. "Power of Ultimate Controlling Owners: A Survey of Canadian Landscape," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 10(2), pages 179-204, May.
    11. Randall Morck & Bernard Yeung, 2010. "Agency Problems and the Fate of Capitalism," NBER Working Papers 16490, National Bureau of Economic Research, Inc.
    12. Soo H. Lee & Taeyoung Yoo, 2008. "Competing Rationales for Corporate Governance in France: Institutional Complementarities between Financial Markets and Innovation Systems," Corporate Governance: An International Review, Wiley Blackwell, vol. 16(2), pages 63-76, March.
    13. Randall Morck, 2009. "The Riddle of the Great Pyramids," NBER Working Papers 14858, National Bureau of Economic Research, Inc.
    14. Nicodano, Giovanna & Regis, Luca, 2019. "A trade-off theory of ownership and capital structure," Journal of Financial Economics, Elsevier, vol. 131(3), pages 715-735.
    15. Gordon L Clark & Ashby H B Monk, 2014. "The Geography of Investment Management Contracts: The UK, Europe, and the Global Financial Services Industry," Environment and Planning A, , vol. 46(3), pages 531-549, March.
    16. Barucci, Emilio & Mattesini, Fabrizio, 2008. "Bank shareholding and lending: Complementarity or substitution? Some evidence from a panel of large Italian firms," Journal of Banking & Finance, Elsevier, vol. 32(10), pages 2237-2247, October.
    17. Goergen, Marc & Renneboog, Luc & Correia da Silva, Luis, 2005. "When do German firms change their dividends?," Journal of Corporate Finance, Elsevier, vol. 11(1-2), pages 375-399, March.
    18. Anna Maria Biscotti & Eugenio D’Amico, 2019. "Does Equity Market Differently Perceive IC Management and Disclosure Behaviours?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(2), pages 756-775, June.
    19. Ettore Croci, 2007. "Corporate Raiders, Performance and Governance in Europe," European Financial Management, European Financial Management Association, vol. 13(5), pages 949-978, November.
    20. Leone Leonida & Marianna Marra & Sergio Scicchitano & Antonio Giangreco & Marco Biagetti, 2020. "Estimating the Wage Premium to Supervision for Middle Managers in Different Contexts: Evidence from Germany and the UK," Work, Employment & Society, British Sociological Association, vol. 34(6), pages 1004-1026, December.

    More about this item

    Keywords

    ISI;

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:38627. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.