Abstract
Over the last 15 years, the ownership of U.K. and global defense companies has changed beyond recognition. A series of mergers, takeovers, strategic alliances and joint ventures in the defense industry, within and across geographic borders, has created a number of major defense systems providers, supported by a larger but again increasingly concentrated group of first-tier supply chain companies. The complex ownership matrix that emerges from this process of industrial restructuring is well-known although the implications for the industry and for corporate behavior have been less well explored. Furthermore, behind the scenes, an even more complex, almost invisible ownership revolution is taking place as the nature, origin, and power of global investors shows distinct signs of change. There has been little research into who actually owns the defense industry. The article sets out ask how that ownership is changing, and with what consequences. These issues are examined from the perspective of a sample of U.K. defense companies. The article also seeks to address the fundamental question: Does defense company ownership matter?
Highlights
This ownership revolution represents a natural adjustment to the post-Cold War world with its new and challenging geopolitical requirements, evolving military strategies, new technologies, and the emergence of competitive new suppliers
For example, does the ownership revolution in defense create or secure market power? Could the ownership of defense companies by particular kinds of investors positively or adversely affect their, or a government’s, military strategies and outcomes? Are there important corporate governance issues involved in the transfer of ownership that might influence or constrain corporate behavior? At a time when alleged corporate scandals in the defense industry have become prominent in the media, these issues take on even greater importance
This article seeks to address questions such as these in an area of defense economics that has been little explored.1. It does so at two levels: first, at the level of the company, where takeovers, mergers, and strategic alliances across the industry are changing fundamentally the commercial landscape; and second, at the level of the shareholder where ownership takes on a new meaning and where best-practice corporate governance is expected and has become a barometer by which corporate behavior is being increasingly judged
Summary
Discussion about corporate ownership and its implications in the. U.K. defense sector would have been largely irrelevant. Coincident with military operations in Afghanistan and Iraq this engendered a new increase in some defense budgets, principally in the United States, where considerations of homeland security and dealing with the “axis of evil,” as it was perceived, pushed defense budgets upward again In this new resurgence of defense spending, the kind of military procurement required has changed and, as a result, new kinds of defense companies. Every aspect of the defense sector is being reconfigured from defense budgets, through procurement policies and military objectives and strategy to leadingedge technological developments designed to meet the requirements of the move toward network-centric warfare.. Every aspect of the defense sector is being reconfigured from defense budgets, through procurement policies and military objectives and strategy to leadingedge technological developments designed to meet the requirements of the move toward network-centric warfare.5 These changes are certain to result in a further fundamental restructuring of the U.K. defense industrial base.. The issue of defense company ownership in the U.K., takes on a greater urgency with the recognition of the revolution currently sweeping through the global defense industry, changing fundamentally its character, location, focus, and modus operandi. Every aspect of the defense sector is being reconfigured from defense budgets, through procurement policies and military objectives and strategy to leadingedge technological developments designed to meet the requirements of the move toward network-centric warfare. These changes are certain to result in a further fundamental restructuring of the U.K. defense industrial base. Major ownership changes have already occurred, and, as the revolution spreads further through the supply base of the industry, further ownership adjustments seem inevitable
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
