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We examine the use of relative performance evaluation (RPE), asymmetry in pay for skill/luck, and compensation benchmarking for a sample of firms involved in a spinoff. The spinoff affects firm characteristics that influence the use of the identified compensation practices. We test for differences in the compensation practices for the pre- and post-spinoff firms. We find that RPE is used for post-spinoff CEOs, but not pre-spinoff CEOs. Post-spinoff CEOs are also paid asymmetrically for luck where they are rewarded for good luck but not punished for bad luck. Both pre- and post-spinoff CEOs receive similar levels of compensation benchmarking. The study provides additional evidence on factors that influence compensation practices. Our spinoff sample allows us to examine how compensation practices are affected by changes in firm characteristics while keeping other determinants of compensation constant (i.e., the board and, in many cases, the CEO). Our findings contribute to the understanding of how the identified compensation practices are used.

Purpose – This chapter presents the results of an exploratory study carried out on activist institutional investor strategies. It aims to identify the way in which different types of institutional investors are reacting to new institutional pressures in the French context.

Design/methodology/approach – Our methodology is based on a series of semi-directive interviews, combined with additional relevant data.

Findings – The interpretation of results makes use of institutional theory, more specifically the work of Oliver (1991). Our study shows that active institutional investors may opt for different responses when confronted with new institutional pressures, and that these responses would seem to depend on antecedents underlined by Ryan and Schneider (2002), which in turn depend on the nature of their business relationships with the firm in which they invest. Whereas pressure-sensitive investors (such as banks and insurance companies) generally adopt acquiescence responses, pressure-resistant investors (such as pension funds and investment funds) pursue joint strategies of co-optation, influence or control with key actors such as local and international proxy advisors and French investor associations. Acting conjointly, certain pressure-resistant investors are often considered as institutional entrepreneurs in that they initiate changes and actively participate in the implementation of new norms in the field of shareholder activism in the French context. In parallel to this ongoing professionalization, other pressure-resistant investors such as activist hedge funds seem to lack sufficient legitimate power to be effective.

Originality/value – This chapter illustrates that the level of institutional investor activism depends largely on the relevant national legal framework. It also shows how institutional investor coalitions take advantage of new institutional pressures to enhance their legitimacy or increase the effectiveness of their action.

In this chapter we study the intra-group transactions between the parent bank and its foreign subsidiaries in European Union (EU) countries during the crisis. We use hand-collected data from annual statements on related party transaction and find that they may create a serious problem for the stability of the foreign banks’ subsidiaries. Moreover, as some of those subsidiary banks were large by assets in some of the member states the related party transactions with the parent bank created a serious threat to the host countries’ financial system stability. We attribute this transaction to the weak governance in foreign subsidiaries. We suggest improvements in governance as well as greater disclosure of related party transactions in bank holding companies in Europe.

The Globally Networked Organization (GNO) is an archetype of the geographically distributed, globally integrated, and organizationally networked information-age multinational enterprise. While its organizational form has been widely discussed, methods for providing strategic direction to all or part of a GNO have been largely overlooked. We propose the concept of strategic animation as an innovative leadership approach to strategic management in the GNO and offer a set of guiding principles for installing such a system in organizations. Strategic animation employs sophisticated incentives to motivate voluntary buy-in, utilizing principles of self-organization to replace the command and control of the unitary firm and the uncertainty and transactional costs of real markets. This makes possible virtual integration of the multiple highly separable businesses that comprise the value-added proposition of the firm and encourages the development of emergent processes for both exploitation and renewal of assets. From a scholarly perspective, this model suggests a new framework for studying the strategic direction of GNOs. For practice, it offers an organizational solution to conditions where process control is preferred, but command of resources is limited. Strategic animation, set in motion through multiple managerial actions, facilitates the timely and flexible responses to chaotic environments that are the sine qua non of today’s global businesses.

The purpose of this paper is to delve into three themes about democratic enterprises.

(1) The first theme is the question of capital structure where labor-managed firms (LMFs) are often pictured as having “horizon problem.” Yet this is only a minor technical problem which is solved by the system of internal capital accounts as in the Mondragon cooperatives.

(2) The second theme concerns the attempt to implement participative management and the related ideas of active learning in educational theory in the workplace. The point is that the democratic firm is the natural setting to implement these ideas, not the conventional firm where the staff have the legal role of “employees” rented by the company.

(3) The third theme is the old canard the cooperatives are incompatible with entrepreneurship. My rethinking of the issue was inspired by the analysis of the late Jane Jacobs who emphasized that the primary means of growing economic “biomass” is through economic offspring (e.g., spin-offs) – in analogy with the biological principle of plentitude. Yet the conventional form of ownership operates as a fetter on this process since the ownership and management wants to expand its empire and maintain “ownership” of any potential offspring. But that constraint against spin-offs is absent in democratic firms, and the Mondragon complex has indeed illustrated how to catalyze this process of growth through offspring.

A public policy to encourage all companies to grow by affiliated and perhaps democratic spin-offs would create more jobs (through filling extra niches) and more stability (through the agility of separate companies).

Two key factors in the success of general-purpose computing platforms are the creation of a technical standards architecture and managing an ecosystem of third-party suppliers of complementary products. Here, we examine Symbian Ltd., a startup firm that developed a strong technical architecture and broad range of third-party complements with its Symbian OS for smartphones. Symbian was shipped in nearly 450 million mobile phones from 2000 to 2010, making it the most popular smartphone platform during that period. However, its technical and market control of the platform were limited by its customers, particularly Nokia. From 2007 onward, Symbian lost market share and developer loyalty to the new iPhone and Android platforms, leading to the extinction of the company and eventually its platform. Together, this suggests lessons for the evolution of a complex ecosystem, and the impact of asymmetric dependencies and divided leadership upon ecosystem success.