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Book part
Publication date: 9 July 2010

Mark S. Mizruchi

The events surrounding the financial crisis of 2008 are well known, and subject to a broad level of agreement. Less accepted are theories regarding the larger context…

Abstract

The events surrounding the financial crisis of 2008 are well known, and subject to a broad level of agreement. Less accepted are theories regarding the larger context within which this crisis was able to unfold. Much has been made of the financialization of the American economy and the lax regulation of new financial instruments, both of which stem from the trend toward a laissez-faire economic policy that has characterized the United States since the late 1970s. I do not take issue with these claims. Instead, I argue that these developments have an earlier and deeper source: a breakdown in the ability of large American corporations to provide collective solutions to economic and social problems, a phenomenon that I term “the decline of the American corporate elite.” From a group with a relatively moderate political perspective and a pragmatic strategic orientation, this elite, through a series of historical developments, became a fragmented, largely ineffectual group, with a high degree of societal legitimacy but a paradoxical lack of power. I trace the history of this group, from its origins in the early 1900s, through its heyday in the post-World War II period, to its decline beginning in the 1970s and escalating in the 1980s. I argue that the lack of coordination within the American business community created the conditions for the crises of the post-1980 period – including the massive breakdown of 2008 – to occur.

Details

Markets on Trial: The Economic Sociology of the U.S. Financial Crisis: Part B
Type: Book
ISBN: 978-0-85724-208-2

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Article
Publication date: 1 June 1991

Abbass F. Alkhafaji

The study of international business has become increasinglyimportant in recent years. So important that the American Assembly ofthe Collegiate Schools of Business (AACSB…

Abstract

The study of international business has become increasingly important in recent years. So important that the American Assembly of the Collegiate Schools of Business (AACSB) has called for the internationalisation of business curricula. In 1992 and beyond, successful business people will treat the entire world as their domain. No one country can operate in an economic vacuum. Any economic measures taken by one country can affect the global economy. This book is designed to challenge the reader to develop a global perspective of international business. Globalisation is by no means a new concept, but there are many new factors that have contributed to its recently accelerated growth. Among them, the new technologies in communication and transport that have resulted in major expansions of international trade and investment. In the future, the world market will become predominant. There are bound to be big changes in the world economy. For instance the changes in Eastern Europe and the European Community during the 1990s. With a strong knowledge base in international business, future managers will be better prepared for the new world market. This book introduces its readers to the exciting and rewarding field of international management and international corporations. It is written in contemporary, easy‐to‐understand language, avoiding abstract terminology; and is organised into five sections, each of which includes a number of chapters that cover a subject involving activities that cross national boundaries.

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Article
Publication date: 1 May 2006

Richard Tudway and Ana‐Maria Pascal

This purpose of this paper is to examine four separate though interconnected questions concerning corporations operating, in Anglo American jurisdictions.

Abstract

Purpose

This purpose of this paper is to examine four separate though interconnected questions concerning corporations operating, in Anglo American jurisdictions.

Design/methodology/approach

The paper first examines the nature of the limited liability corporation as an entity dedicated to maximizing shareholder value, and how far this role is consistent with the pursuit of wider policies of corporate social responsibility (CSR). Second, it reviews the ownership arrangements of the corporation, the fiduciary duties of board directors and how this is translated into the task of maximizing shareholder value through the pursuit of profits. Third, it investigates how directors position themselves commercially in maximizing shareholder value and whether shareholders express views on how shareholder value can best be maximized. Finally conclusions are drawn on how best corporations and their directors can address the challenge of meeting shareholder value and how far this implies realignment in terms of wider societal expectations. The method of research used includes an examination of statute law governing the corporation, judge's law, regulatory law, other soft law in the context of outsider controlled capital markets. Relevant published research material is also declared in the bibliography.

Findings

Conclusions drawn suggest that the premise of maximization of shareholder value may very well entail the pursuit by directors of wider social and economic objectives consistent with CSR, if this is consistent with the enhancement of shareholder value. They also point to a lack of clarity on the question of what is expected of directors in meeting their fiduciary and broader director's duties as expressed in the objective of maximizing shareholder value. Evidence suggests that there is little effective communication between shareholders and directors on how best shareholder value can be maximized. Specifically the analysis focuses on how best to overhaul the mechanisms of governance and accountability if directors and the shareholders they represent are to develop and execute rational commercial policies aimed at maximizing shareholder value.

Originality/value

The paper breaks new ground in linking CSR to the enhancement of shareholder value and in suggesting that directors may be negligent in their duty to promote shareholder value if they fail do so. The paper should be of interest to company directors, company legal advisors; other corporate lawyers involved in litigation against directors, and policy makers in government.

Details

Corporate Governance: The international journal of business in society, vol. 6 no. 3
Type: Research Article
ISSN: 1472-0701

Keywords

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Article
Publication date: 1 February 1997

A.V. SUBBARAO and DANIEL ZEGHAL

Human resources are considered the most important component of a corporation's competitive advantage in global markets. Society, workers and shareholders expect…

Abstract

Human resources are considered the most important component of a corporation's competitive advantage in global markets. Society, workers and shareholders expect corporations to manage and utilise human resources not only for the competitive advantage of a corporation but of a nation. Corporations are expected to disclose information relating to the management of human resources in their annual reports. This study analysed the annual reports of a sample of publicly traded corporations in six countries (USA, Canada, Germany, UK, Japan, and S. Korea) for the purpose of an international comparison of human resource information disclosure. Results of the analysis revealed that corporations in different countries differed in the disclosure of human resources information. In particular, those in Europe disclosed more human resources information than those in Asia and North America. The corporations in the financial services sector, which employed over two thirds of the workforce in the developed countries were also different from those in the manufacturing sector in disclosure of human resources information. The details of the differences between the two sectors, and among the six nations of the three continents, in terms of the incidence (frequency) and the word count (content) of information disclosed on different hitman resources issues in the annual reports are presented in the paper.

Details

Journal of Human Resource Costing & Accounting, vol. 2 no. 2
Type: Research Article
ISSN: 1401-338X

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Book part
Publication date: 10 August 2018

Matthew Lee and Christopher Marquis

A large and growing literature examines the explicit social responsibility practices of companies. Yet corporations’ greatest consequences for social welfare arguably…

Abstract

A large and growing literature examines the explicit social responsibility practices of companies. Yet corporations’ greatest consequences for social welfare arguably occur through indirect processes that shape the social fabric that sustains generosity and mutual support within communities. Based on this logic, we theorize and test a model that suggests two pathways by which large corporations affect community philanthropy: (1) through direct engagement in community philanthropy and (2) by indirectly influencing the efficacy of community social capital, defined as the relationships among community members that facilitate social support and maintenance of social welfare. Our analysis of United Way contributions in 136 US cities over the 46 years from 1952 to 1997 supports our model. We find that the presence of corporations weakens the contributions of both elite and working-class social capital on community philanthropy. Our findings thus contribute to a novel view of corporate social responsibility based on how corporations influence the social capital of the communities in which they are embedded.

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Book part
Publication date: 30 October 2018

FR. Oswald A. J. Mascarenhas, S.J.

The over 125-year-old economic miracle called the Corporation is suddenly shaken in its foundations. The corporate business world is rapidly changing not only in the USA…

Abstract

Executive Summary

The over 125-year-old economic miracle called the Corporation is suddenly shaken in its foundations. The corporate business world is rapidly changing not only in the USA, but also across the globe. The front covers of business magazines and dailies, once dominated by names and faces of “Corporate Giants,” are now being replaced with success stories of great startups and small business entrepreneurs. The reasons for these radical changes progressively reveal the imperfections existing in the current corporation and the business boardroom paradigm. For over a century, huge corporate entities spawned by capitalism have established and entrenched themselves in their respective industry arenas and have since been ruling the world, dominating money, capital, cash, and market opportunity. Once they provided solutions to people’s employment and career needs, they have made a fortune for themselves thereby. In the course of their evolution, the businesses have transformed into corporations, seeking people’s money for doing business and, in turn, giving a share of proportionate ownership to the investor people in the form of dividends and capital gains. Such a brilliant method of raising capital has empowered the corporations to grow and expand beyond physical and political boundaries. Today, however, the corporations are run by the BOD, most of whom are representing gigantic promoter-investor institutions. That is, the main administrative role is now replaced by private equity firms and hedge funds that provide the required capital but who also exert undue pressures on CEOs to focus on short-term strategies that have massive profitability potential, thus defying the usual business management model and paradigm the CEOs were trained for in B-schools. The massive CEO exodus that has migrated from the traditional corporations to newly created startups and smaller business entrepreneurial ventures has also made the corporation an endangered species. In such a market turbulence, how do we redefine, redesign, and reinvent the morally embattled corporation? This chapter explores solutions.

Details

Corporate Ethics for Turbulent Markets
Type: Book
ISBN: 978-1-78756-187-8

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Article
Publication date: 2 January 2009

Carol A. Adams and Glen Whelan

The purpose of this paper is to conceptualise how future changes in corporate social disclosure (CSD), aimed at improving accountability for corporate performance to key…

Abstract

Purpose

The purpose of this paper is to conceptualise how future changes in corporate social disclosure (CSD), aimed at improving accountability for corporate performance to key stakeholder groups, might be brought about.

Design/methodology/approach

Drawing on the work of the Austrian economist Ludwig von Mises with respect to human (and organisational) action and the work of Leon Festinger and Kurt Lewin with respect to human (and organisational) change, the paper examines how academics and other corporate stakeholders might effect changes in CSD.

Findings

Managers act in a way which maximises their formal happiness (from von Mises) and change occurs following the creation of cognitive dissonance (Festinger) which leads to “unfreezing” (Lewin). Stakeholders can effect change by creating cognitive dissonance. With specific reference to Anglo‐American limited liability and publicly traded corporations, such cognitive dissonance and unfreezing normally involves a perceived threat to profitability.

Research limitations/implications

Research and theorising in corporate social disclosure patterns should take as given: that the managers of Anglo‐American limited liability and publicly traded corporations continue to be strongly encouraged, via both legal and remunerative means, to maximize shareholder wealth; and that this state of affairs significantly influences the information which management choose to disclose. Future research might instead examine and consider means of creating sources of dissonance significant enough to result in managerial concern for change within the constraints imposed on managers of Anglo‐American corporations. Such research might be conducted by engaging with organisations and their stakeholders.

Practical implications

The findings have implications for the manner in which corporate stakeholders act and interrelate with others in order to effect change towards more complete and credible sustainability reports which demonstrate accountability for material impacts to key stakeholder groups.

Originality/value

The paper focuses on how change in corporate behaviour might be brought about given the personal motivations and institutional constraints imposed on the behaviour of corporate actors.

Details

Accounting, Auditing & Accountability Journal, vol. 22 no. 1
Type: Research Article
ISSN: 0951-3574

Keywords

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Article
Publication date: 1 June 1994

David C. Wyld

This paper examines the applicable scope of United States employment discrimination law to “American” employers of U.S. citizens abroad. Through an analysis of the…

Abstract

This paper examines the applicable scope of United States employment discrimination law to “American” employers of U.S. citizens abroad. Through an analysis of the extraterritorial dimension of American anti‐bias, it is demonstrated that over time, it has become accepted that the full‐range of U.S. anti‐bias law applies transnationally. However, just who is considered an “American” firm is an open‐ended question under the Mas Marques test codified in the Civil Rights Act of 1991. The implications of this ambiguity could well lead to potential legal conflicts in the area of employment discrimination for a multitude of firms worldwide who may not consider themselves presently to be bound by United States employment law.

Details

Equal Opportunities International, vol. 13 no. 6/7
Type: Research Article
ISSN: 0261-0159

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Article
Publication date: 1 May 1999

Richard L. Brinkman

This paper analyzes and explains the dynamics of corporate evolution in the context of anthropologist conception of culture. The multinational corporate characterizing the…

Abstract

This paper analyzes and explains the dynamics of corporate evolution in the context of anthropologist conception of culture. The multinational corporate characterizing the Galbraithian world, as The New Industrial State, dominates the current economic landscape. The conception of corporate culture and its dynamics lays bare the locus of corporate power which resides in the control of corporate technology. Granting this dynamic, the question then arises concerning the agency which controls the application and use of this cumulated corporate power. Corporate power and policy in the USA are currently directed by a social institution in the form of profits without social responsibility. This policy is manifest in a “low road” of cost reduction. Such a policy direction exacerbates rather than ameliorates the current economic malaise now characterizing the US economy.

Details

International Journal of Social Economics, vol. 26 no. 5
Type: Research Article
ISSN: 0306-8293

Keywords

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Book part
Publication date: 14 January 2019

Morgan R. Clevenger and Cynthia J. MacGregor

This interorganizational discussion covers Astley and van de Ven's (1983) Organizational Analysis Matrix and key information to understand a broader, macro discussion…

Abstract

This interorganizational discussion covers Astley and van de Ven's (1983) Organizational Analysis Matrix and key information to understand a broader, macro discussion including the purpose of organizations in society as well as overview the interorganizational relationships between the for-profit sector (i.e., businesses and corporations) and the specific sector of higher education. A consideration of motives, return on investment expectations, and interorganizational behavior is explored. This chapter highlights the complex nature of higher education and the for-profit realm, including inconsistent third-party support and intermingling from the government. Highlights from Sethi's (1975) seminal article serves as the basis for measurement and future expectations in a three-state schema for classifying corporate behavior.

Details

Business and Corporation Engagement with Higher Education
Type: Book
ISBN: 978-1-78754-656-1

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