The influence of the state on the strategic choices of defence companies: the cases of Germany, France and the UK after the Cold War

Abstract

This article aims to better understand the influence of public policies (and particularly public procurement) in strategic choices by defense companies after the end of the Cold War. Three countries were studied: Germany, France and the United Kingdom. In the early 1990s, governments as well as defense companies had to face various radical changes, such as drastic shifts in the geopolitical environment, major technological disruption (specifically in the field of information and communication) and globalization. Governments were expected to exert their responsibility for national defense in a context of strong incitation to reduce military spending (the so-called “Peace Dividends”). Despite an initial willingness to cooperate and promote a common European Defense approach, public policies varied widely among countries. The article identifies several similarities in the way defense companies responded to these national policies. The studied cases suggest a strong influence of public policy in how these companies re-designed their strategy. We conclude by depicting the complex, multi-dimensional environment of public defense policies and how they affect corporate strategies in an ever-evolving context. A comparison among key influencing factors suggests that the role of the state is not uniform across national borders.JEL Codes: L1, L5, F5, O3