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Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited
Corporate strategy formulation and taxation: evidence from UK firms
Article Type: Abstracts From: Strategic Direction, Volume 24, Issue 8.
Glaister K.W., Hughes J.F. British Journal of Management, March 2008, Vol. 19 No. 1, Start page: 33, No. of pages: 16
Purpose to investigate relationships between multinational company (MNC) strategy and international taxation decisions. Design/methodology/approach sees taxation as a financial factor affecting investment decisions, conducts a brief review of literature addressing MNCs and international taxation, identifies three possible decision sequences of strategy decisions preceding tax decisions, tax decisions preceding strategy decisions, or strategy and tax decisions taken simultaneously, discusses the strategic management and tax planning processes, and asks if taxation decisions are intended, deliberate and driven by optimization, and how strategic and taxation decisions are integrated. Answers the questions using two methods, the first interviewing tax practitioners in seven UK-based MNC, the second questionnaire-surveying tax practitioners in 145 UK firms known to engage in international business. Findings shows, from the seven interviews, that whilst tax issues were a decision factor, commercial factors dominated in strategic decision-making, tables 15 statements and their rankings used in the survey, indicates that respondents’ companies did not have very formal strategy and taxation planning processes, but reports that respondents believed that strategic decisions could be optimized to a greater extent than taxation decisions. Originality/value demonstrates that strategy decisions are taken before tax decisions. ISSN: 10453172 Reference:37AF494 DOI: 10.1111/j.1467-8551.2007.00532.x
Keywords: Corporate strategy, International accounting, Multinationals, Tax planning, Taxation, Taxes