Large American Corporations Research Articles

Unpacking the dynamics in acquisition of capabilities: the role of identities during postmerger integration

PurposeDespite best intentions, mergers and acquisitions often do not live up to the expectations for performance. This study examined how the salience of multiple identities creates dynamics in postmerger integration processes and how these dynamics influence the acquisition of the target's capabilities.Design/methodology/approachThe authors conducted an in-depth case study of a large American consumer goods multinational corporation's acquisition of a family-owned German beauty business and examined responses to decisions and events during the postmerger integration process.FindingsThe results show how and why efforts to acquire unique target capabilities might not deliver the hoped-for results. The authors discovered multiple identities that became salient during the postmerger integration process which subsequently influenced interpretations and reactions to decisions and events and which created intergroup dynamics. The authors also noted the role of language in making these identities salient. Such dynamics pose challenges to managing the postmerger integration process and to acquiring sought after capabilities.Originality/valueThis study reveals how different identities become salient in the interpretation of particular events and decisions, resulting in emotional and behavioral reactions and intergroup dynamics. Furthermore, it uncovers the role of language in making identities salient. This study offers further insight into identity dynamics when the capability of the target firm is the motive of the acquisition.

Corporate Purpose and Corporate Competition

The large American corporation faces ever-rising pressure to pursue a purpose beyond shareholder profit. This rising pressure interacts with changes in industrial organization in a way that has not been comprehensively analyzed and is generally ignored. It’s not just purpose pressure that is rising: firms’ capacities to accommodate that pressure for a wider purpose is rising as well. Three changes in industrial organization are most relevant: the possibility of declining competition, the counter-possibility of increasing winner-take-all competition, and the possibility that the ownership of the big firms has concentrated (even if the firms themselves have not), thereby diluting competitive zeal. Consider competitive decline: In robustly competitive economies, firms cannot deviate much from profit maximization for expensive corporate purpose programs unless they bolster profitability (by branding the firm positively for consumers or by better motivating employees, for example). In economies with slack competition, in contrast, monopolistic and oligopolistic firms can accommodate purpose pressure from their excess profits, redirecting some or much excess profit from shareholders to stakeholders—to customers, employees, or the public good. By many accounts, competition has been declining in the United States. By some accounts, it has declined precipitously. That decline suggests three possibilities: One—the central thesis of this Article— purpose pressure has greater potential to succeed if competition has declined or rents have otherwise grown; in competitive markets, the profit-oriented but purpose-pressured firm has no choice but to refuse the purpose pressure (or to give it only lip service), while in monopolistically-organized industries, the purpose-pressured firm has more room to maneuver. Two, the normative bases undergirding shareholder primacy, although still strong, are less powerful in monopolistic markets. Three, declining corporate competition and rising corporate profits create a lush field for social conflict inside the firm and the polity for shareholders and stakeholders each to seek a share of those profits. The result can infuse basic corporate governance with social conflict, contributing to or exacerbating our rising political and social instability. Expanding purpose pressure is one manifestation of this conflict.

Accounting Discoveries from Archival Research: The Mobile and Ohio, an Antebellum Southern Railroad

This paper details discoveries relating to the accounting transactions that chronicle the circumstances of the Mobile and Ohio (M&O) Railroad's 1850s and 1860s asset ledgers. There were accounting differences between railroads overall because the northern lines used foreign construction workers, while the southern lines used slaves. ‘Personal Property’ was the title given to the account used by the M&O to record the acquisition of slaves—with the accountant using the term ‘slaves’ in a journal entry description. Moreover, this research provides information regarding the construction labour for the M&O that was supplied by planters from plantation labour pools composed of the slave population. Because of the availability of this plantation labour pool, the M&O did not have to rely on immigrant labour and accept the risk of controlling their behaviour. The coming of the American Civil War changed labour market conditions, and the M&O became a slave‐holding organization to maintain itself during the War. At the War's end the accounting records detail the M&O's disposition of the wartime slave acquisitions with the comment ‘… emancipated by force of circumstances’. This paper contributes to the literature by providing discoveries from original archival records documenting how a large major American corporation accounted for labour costs, initial construction, and beginning operations.

The decline of science in corporate R&D

Research summary: In this article, we document a shift away from science by large corporations between 1980 and 2006. We find that publications by company scientists have declined over time in a range of industries. We also find that the value attributable to scientific research has dropped, whereas the value attributable to technical knowledge (as measured by patents) has remained stable. These trends are unlikely to be driven principally by changes in publication practices. Furthermore, science continues to be useful as an input into innovation. Our evidence points to a reduction of the private benefits of internal research. Large firms still value the golden eggs of science (as reflected in patents), but seem to be increasingly unwilling to invest in the golden goose itself (the internal scientific capabilities).Managerial summary: There is a widespread belief among commentators that large American corporations are withdrawing from research. Large corporations may still collaborate with universities and acquire promising science‐based start‐ups, but their labs increasingly focus on developing existing knowledge and commercializing it, rather than creating new knowledge. In this article, we combine firm‐level financial information with a large and comprehensive data set on firm publications, patents and acquisitions to quantify the withdrawal from science by large American corporations between 1980 and 2006. This withdrawal is associated with a decline in the private value of research activities, even though scientific knowledge itself remains important for corporate invention. We discuss the managerial and policy implications of our findings.

Subaltern mediators in the digital landscape

This article explores translational literary Web 2.0 practices and user-generated cultural creations on the Internet, focusing on video poetry that re-creates canonical poets’ bodies of work. It will be argued that the use of for-profit platforms like YouTube and Vimeo by indie creators and translators of video poetry favours the emergence of new translational attitudes, practices and objects that have positive but also contentious effects. One the one hand, these online mediators explore new poetic expressions and tend to make the most of the potential for dissemination of poetic heritage, providing visibility to non-hegemonic literatures. On the other hand, however, these translational digitally-born practices and creations by voluntary and subaltern mediators might reinforce the hegemonic position of large American Internet corporations at the risk of commodifying cultural capital, consolidating English as a lingua franca and perhaps, in the long run, even fostering a potentially monocultural and internationally homogeneous aesthetics.

What comes around: the early 20th century American roots of legitimating corporate social responsibility

Understanding why explicit, managerial-centred corporate social responsibility (CSR) which first developed in the United States, has recently spread globally requires an examination of the circumstances under which it first emerged. CSR arose out of the success of large American corporations of the early 20th century in preventing unionization or significant regulation of their workplaces, a success that required firms to assume responsibility for employee welfare, not only to promote efficiency and prevent a resurgence of labour activism, but also to reassure traditionalists concerned with new white collar employment relations. Corporate executives discovered that positive publicity with regard to personnel policies helped them manage other controversies, so after World War I, some began to extend claims of being responsible employers to argue for a more comprehensive set of social responsibilities. The onset of the Depression and its aftermath reduced the significance of managerial voluntarism for almost a half century, but the rise of neo-liberalism has revived managerial CSR, although once again it may not survive a global crisis.

Who Killed the Inner Circle? The de-cohesion of the American corporate elite, 1997-2010

This paper analyzes the properties of the board interlock network connecting large American corporations between 1997 and 2010. We find that the former stability of the network—in which a handful o...

A Capitalism of Owners: Policies for a Fair and Sane (Business) World

For all its faults, the private business system has been, and should remain, a driver of innovation, a creator of wealth for all, a harbinger of economic freedom. We have seen and experienced in the former socialist countries of Eastern Europe the suffocating system of fear and scarcity that emerged when markets were eliminated and private business enterprises banned.The benefits of markets and private enterprises are again at risk, but this time not from leftist ideologues and agitators. Under the vicious, pervasive influence of financial markets, anchored in a self-serving neoliberal ideology, corporations of the “contemporary” kind, particularly in the financial sector, are turned into nests of greed and tools for the enrichment of speculators.This sort of economic arrangement, which came about over the last 20-30 years in so-called Anglo-Saxon countries and was adopted broadly in many parts of the world, has brought the international financial system within a hair’s breadth of total collapse1. It plays a key, but often overlooked, role in almost all business shenanigans. It drives management to take actions that are not in the long term interest of the corporation or of the society in which it operates.This type of corporation has grown over the years, abetted, even promoted, by institutional investors and governance champions.Although well intentioned, they failed to realize they were planting the seeds of destruction of the sort of managerial capitalism that served societies so well for so long.How have we come to this state of affairs with recurring crises, financial double-binds and easy willingness to inflict on citizens the pain of failed policies? The answer resides in the neo-liberalism that has dominated policy making since Reagan-Thatcher but with a renewed fervour after the fall of the Berlin wall in 1989, which left “free markets” neo- liberalism as the only ideology standing.If governments of threatened countries (the USA, several members of the European Community) do not bring about a return to some fairness and sanity in their business and financial world, they may well trigger unmanageable social unrest and an acute loss of legitimacy, which arealways the forerunners of political and social mayhem. The whole world would bear the economic costs of this nasty turn of events.For, people will not accept for long to serve as “bank fodder”, as guinea pigs for “financial innovations”, as patsies in the game of global finance.In our previous book, Black Markets and Business Blues, we traced the evolution of business enterprises over the course of the last thirty years. We showed how and why managerial capitalism was replaced by financial capitalism, a corrupted system which brought about repeated fiascos. Then, as a member (Allaire) of the Global Council on the Role of Business of the World Economic Forum, we made several rather radical recommendations to bring about change in this system, recommendations which were surprisingly well received by a group made up of several chief executives of large American and international corporations as well as university scholars. This book builds on these two foundations. Its purpose is, so to speak, to rub the nose of readers in the stuff of which financial markets are made, to bring readers close to the action, right in the midst of the dynamic interplay between financial analysts, investors, speculative funds, corporate management, and boards of directors. Only with an empathic understanding of the pressures exerted on the management of publicly listed corporations can one fathom the depth of changes that need to come about to bring some sanity back to the world of business and finance.

Sins of Omission and Commission: Strategic Cultural Factors and US Intelligence Failures During the Cold War

American intelligence professionals have long understood that the US intelligence community is, and always has been, a closed and insular society, with each agency within the intelligence community taking pride in having its own unique bureaucratic identity, distinct corporate culture, operating environments, social dynamics, and internal behavior patterns that have been molded and shaped by external events and internal forces over the past 60 years. These ‘strategic cultural’ factors mean that the agencies comprising the US intelligence community are, in many respects, unique bureaucratic entities, operating far differently than comparable large American corporations and government agencies. These strategic cultural factors shape and define the environment within which the US intelligence agency works, dictate how American intelligence agencies perform their mission, and also help to explain why they repeatedly make the same mistakes and find it difficult to fix the longstanding problems which contributed to the failures. Within the context of the recent 9/11 and Iraqi weapons of mass destruction intelligence failures, this article explores the role played by these strategic cultural factors in helping to explain a series of historical intelligence failures by the US intelligence community.

Chinas Entry Into World Trade Organization And Its Benefits For U.S. Industries

The November 15th agreement imposes much more substantial concessions on China than on the U.S., which merely grants permanently what it has long granted annually. Chinas Concessions are the price of U.S. support for Chinese membership. Both these concessions and the WTO rules themselves should have profound impact on China, considerably opening its economy to foreign competition. WTO membership ought to compel China to change its current commercial laws and practices to conform to WTO rules. Once it is a WTO membership, China would need to negotiate trading terms on a multilateral basis with all members at once. Chinas concessions will benefit many major industries; among those likely to gain most are farmers, financial companies and high-tech industries. U.S. law and accounting firms are also granted expanded access under the agreement. It is widely assumed that large American corporations stand to benefit significantly from the liberalization measures that China has proposed as part of its accession to the WTO. The purpose of this research is to investigate Chinas entry into WTO and its benefits for U.S. industries.

Race at the top: How companies shape the inclusion of African Americans on their boards in response to institutional pressures

Drawing on institutionalist theory, we conceptualize the racial composition of the boards of directors of large American companies as shaped in response to social and political norms. We use new longitudinal and cross-sectional data to test hypotheses about factors that shape the degree of racial inclusion on boards of directors among large public corporations, and we draw upon in-depth interviews with key participants to gain insights into the mechanisms that are likely to have generated the patterns we detect in our statistical models. We find evidence suggesting that large American corporations manage the racial composition of their elite leadership groups in response to these norms.

Schumpeter and the Obsolescence of the Entrepreneur

The English-language literature of technological change is one of the few areas of economic writing in which Joseph Schumpeter has maintained a following and in which he has been accorded some modicum of the attention he deserves. There has grown up within this literature a standard interpretation of Schumpeter's famous assertion that progress will eventually come to be 'mechanized'. The conventional wisdom goes something like this. The argument in Schumpeter's early writings by which writers invariably mean the 1934 English translation of The Theory of Economic Development -- is really quite different from that in Capitalism, Socialism, and Democracy. There are, in effect, two Schumpeters: an 'early' Schumpeter and a 'later' Schumpeter. It was the former who believed in the importance of bold entrepreneurs, while the latter envisaged their demise and replacement by a bureaucratized mode of economic organization. Moreover, the reason Schumpeter changed his views is that he was reacting to the historical development of capitalism as he saw it taking place around him. As he moved from the world of owner-managed firms in early twentieth-century Europe to the world of large American corporations in the 1930s and 1940s, his opinions changed appropriately. The paper attempts to make two points. The first is that, as a doctrinal matter, the 'two Schumpeters' thesis, as it is understood in the Anglo-American literature on technological change, is clearly wrong. Equally wrong is the idea that the fundamentals of Schumpeter's thought on entrepreneurship were influenced importantly by any observation of large firms in the United States after 1931. Schumpeter's ideas were remarkably consistent from at least 1926 (five years before he came to the U. S.) until his death. The obsolescence thesis speaks to a distinction between early capitalism and later capitalism, perhaps, but not to an earlier and later Schumpeter. The second, and more important, point is that the obsolescence thesis is wrong. It rests on a confusion -- or perhaps a bait-and-switch -- between two quite different kinds of economic knowledge.

Psychological Aspects of the Current Economic Crisis

In this article the formation of new «market psychology» in the conditions of pyramidal globalization and liberalization, as a general precondition of the current crisis, is considered. Basic elements of this psychology - shift of US households from saving up behavior to credit-dependent consumption, transition of large American corporations under the control of financial hawks, creation of the system of global capital inflow to the USA. On this basis a quasi-keynesian model of unstable equilibrium at the stage of growth generated by external credits is put forward. The conclusion is made that psychological disbalance of ruling elites of the USA, on the one hand, and Western Europe and Japan - on another interferes with maintaining global economy stability.

A Typology of Media Users in a Multinational Corporation

Due to the contemporary action of a number of variables, large organizations can be hardly considered communities of similar types of media users. Likely, they are populated by different groups, which mix in different ways within and between departments, functions and groups. The identification of the types and characteristics of media users is vital for effective internal and external communication. Among three European subsidiaries of a large American corporation three groups have been evidenced, and depicted as characterized by traditional, computer-mediated, and multi-media users. They present quite marked differences in terms of actual communication means, gender, age, and education level. It emerged that email use intensity is a good proxy to identify the types, because traditional media users are totally uncorrelated with this index, while the other two groups are positively correlated and associate with it growing from multi-media to CMC. These latter can also be identified by looking at the number of work related emails.

AMERICA'S LARGEST BLACK-OWNED COMPANIES: A 30-YEAR LONGITUDINAL ANALYSIS

This article investigates the largest American black-owned companies over a 30-year period, from 1974 to 2004. Trends with regard to the growth and decline of industry categories and of individual companies, and with regard to these companies' survival rates, are analyzed. Comparable survival rates of small businesses in general, of minority businesses, and of large corporations are investigated. The important factors of corporate minority procurement programs and government minority set-aside programs are evaluated. The phenomenon of large American corporations acquiring some of the most successful black-owned businesses is also studied. These various factors relating to black business success and failure lead to a range of implications and recommendations for current and aspiring minority business owners, as well as to consultants to and researchers of minority business.

Pensions and Corporate Performance: Effects of the Shift from Defined Benefit to Defined Contribution Pension Plans

American corporations that sponsor pensions may have defined benefit (DB) pension plans, defined contribution (DC) plans, or both, and have been shifting toward DC plans over the past 25 years. We investigate the effect of cross-firm and time-series variation in the DC share of pension assets on corporate financial performance. The data set consists of a group of large American corporations contained in the both the Pension and Investment top 1000 pension sponsors and Compustat and covers the 1997 - 2003 period. Using several return measures, including the return on assets, the operating return on assets, and the return on equity, we find that larger DC shares tend to be associated with higher returns. We interpret these results as arising in part from more efficient worker retirement and mobility decisions under DC plans.

Open Source's Lessons for Historians

Of all the developments in the recent history of computing, none has attracted such widespread attention as the emergence of the open-source software movement. In part, this is due to the remarkable successes of such open-source projects as Linux, Sendmail, and Apache. Versions of the GNU/Linux operating system are used by 40 percent of large American corporations, 65 percent of the world’s Web servers run Apache, and Sendmail manages 80 percent of the world’s email. Even traditional commercial vendors such as IBM, Apple, and Novell have jumped on the opensource bandwagon; the Macintosh OS X operating system is based on a BSD derivative, and IBM recently announced a $1 billion commitment to open-source development.1 Despite these apparent successes, however, the lessons of the open-source movement are not necessarily those that its proponents might hope or imagine. They suggest more about new methods and questions for historians to grapple with than obvious conclusions about a new “one best way” to manage software development.

Co-Workers in the Kingdom of Culture: Black Swan Records and the Political Economy of African American Music

In London in 1923, W. E. B. Du Bois addressed the third Pan-African Congress on the topic of “The American Negro.” In his talk he jumped from familiar themes such as voting rights and lynching to one topic that stood out: attempts by a large American phonograph record corporation to bankrupt Black Swan Records, a small, blackowned company that produced records for African American consumers. Why would a large phonograph corporation launch such a campaign? And why would it merit Du Bois’s attention in that heady forum? By way of answering those questions, this article investigates the rise and fall of the small record company and explores the complex political economy in which it operated. Black Swan was established by a former protege of Du Bois, Harry H. Pace, who saw the company as a powerful means to respond to the hostile conditions African Americans faced, both in the entertainment business and in American society at large. At stake was not merely entertainment but access to, and control of, material resources that could cultivate and boost African Americans’ creative spirits, support and encourage African American business development and economic self-sufficiency, and, it was believed, help shape popular opinion to produce tangible social, political, and economic benefits for African Americans.1

The Chief Executive Officer of the Large American Industrial Corporation in 1917

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The relationship between budget participation and job performance: The roles of budget adequacy and organizational commitment

This study explores the linkages between budget participation and job performance. In the proposed theoretical model, budget participation affects job performance via two intervening variables: budget adequacy and organizational commitment. Accordingly, budget participation leads to high budget adequacy which, in turn, increases job performance directly and indirectly via organizational commitment. To test the proposed relationships, a survey questionnaire was administered to managers of a large American corporation. The results of path analysis support the hypothesized relationships.