Showing papers on "Corporate group published in 1991"

Mergers, acquisitions, and the pruning of managerial deadwood

Abstract: This research investigates the role that mergers and acquisitions may play in the disciplining of entrenched and inefficient managers. The relationship between a company's performance history and its subsequent top management turnover is assessed for a sample of target companies, their parents, and a control group of companies not involved in merger and acquisition activity. The results reveal that target company top management turnover is higher than ‘normal’ in the 2 years immediately following a merger or acquisition, but there is no relationship between previous target company performance and its subsequent top management turnover. Further analyses indicate that first-year target company turnover rates are associated with a history of relatively poor parent company performance, while second-year turnover rates are associated with a history of relatively good parent company performance.

Corporate Financial Structures in Developing Countries

Abstract: Questions of corporate capital structures have long attracted the interest of researchers in developed countries, and their are clear links between these issues and debates over the kinds of financial markets and institutions that are supportive of long-term growth Yet there has been very little empirical work on the capital structures of corporations in developing countries This study presents the preliminary results of the work done, based on an analysis of accounting data from large corporations in nine countries - India, South Korea, Pakistan, Thailand, Mexico, Malaysia, Turkey and Zimbabwe Central among the conclusions of this report is the finding that corporate capital structures in developing countries differ in important ways from those in developed countries These differences are particularly marked with respect to the use of external finance and the use of equity finance; both of which are much higher in developing than in developed countries

Efficient or Exclusionist? The Import Behavior of Japanese Corporate Groups

Abstract: IN THEIR DISPUTES with Japan, U.S. trade negotiators have increasingly concentrated on deeply rooted structural aspects of the Japanese economy. In the recent structural impediments initiative (SII), for example, the U.S. government argued for increased antitrust enforcement, and, in particular, for increased policing of Japanese corporate groups known as keiretsu. Thejoint report issued at the conclusion of the SII recognized that "certain aspects of economic rationality of Keiretsu relationships notwithstanding, there is a view that certain aspects of Keiretsu relationships also promote preferential group trade, negatively affect foreign direct investment in Japan, and may give rise to anticompetitive business practices. "' In response to the SII, the government of Japan agreed to strengthen its Fair Trade Commission's (FTC) monitoring of transactions among keiretsu firms and to take the necessary steps toward eliminating any restraints on competition that might arise from their business practices.

Symbolism, Collectivism and Rationality in Organisational Control

Abstract: The results of a longitudinal field study (1967‐89) of International Foods, a holding corporation for a group of companies in Pakistan is presented. It focuses on the influence of societal culture on the development of accounting and control practices in the organisation. Four specific issues are examined: How do organisations initiate accounting and control systems? How do such systems evolve? What roles do they play in a crisis? How does organisational action become disconnected from such systems? National culture, particularly as it shapes the world views of individuals, greatly enhances our understanding of the dynamics of accounting and control systems in organisations. The local nature of rationality is demonstrated by showing how contextualising practices allow us to make sense of them.

Explaining Asian economic organization

Abstract: Social theorists are challenged to explain an increasingly complex economic order It is clear that old theories that posited a developmental sequence from “undeveloped” to “industrialized” cannot explain the diverse patterns of industrialization that exist Certainly, Japan is as developed as Western nations but its patterns of development, its economic norms, and its industrial practices are substantially different from the United States and even its Asian neighbors in Taiwan and South Korea For example, the fact that Japan has the largest banks in the world, and Taiwan relatively few and weak ones (despite the world's largest per capita foreign reserve holdings), cannot be explained only by recourse to market or state factors, although each play a role Both countries were literally awash in money in the 1980s, and both countries are clearly capitalist societies where banking institutions are assumed to be critical to economic development, as they have been in the West But more than market and political economy factors are at work here In Japan, historically developed institutional factors, dating from before the Meiji Restoration and industrial revolution, created conditions for business group self-financing Modern-day keiretsu, such as Sumitomo and Mitsui, with their huge banks as centerpieces, trace their origins to pre-industrial merchant houses under family ownership Inheritance practices in Japan are based on primogeniture, inheritance of the entire fortune by the eldest son This practice allowed merchant family fortunes to remain intact under the stewardship of the heir Successful families thus had huge sums of money available to finance the businesses of affiliated branches operating under the “badge” of the mother house The descendents of the zaibatsu merchant houses, the keiretsu, continue to rely on their own sources of finance, now institutionalized in banks that serve their credit and other financial needs To see large banks encapsulated within business networks as only the outcome of distorted market conditions, or as only the result of a powerful business class, misses the institutional origins and overlooks the contemporary institutional underpinnings of the Japanese banking system Ironically, the weakness of Taiwanese banks can also be traced to a strong family system Chinese societies practice partible inheritance, that is, division of a family estate equally among all sons As a result, families divide their fortunes every generation, mitigating against the development of large sums of money Instead, there is great pressure within families to develop multiple businesses so that at the death of the family head, each son can claim an independent enterprise Because all Chinese families face the problem of setting up children in business (being an employee is not a desirable status in Taiwan as it is in Japan), a range of informal lending arrangements have arisen within families and among friends to generate investment capital Strong social norms dictate that one assist financially a kin member or close friend Banks play a relatively minor role in Taiwan because alternative institutional arrangements, also with preindustrial origins, have obviated the need for banks for some financial functions Again, market factors are important to understanding the strong curb market and weak formal banking system in Taiwan, and political economy factors, notably the absence of a strong central bank, are also significant But an institutional explanation integrates these factors into an explanation that begins with the character of the society being explained We need theories that can account for difference without reducing cases to unique instances, that do not presume the individualistic character of Western social orders, and that are sensitive to an array of ideal as well as material factors operating in different locations Although political economy, market, and culture theories each have contributions to make, an institutional perspective of the type I outline may be especially suited to the comparative analysis of emerging world economic organization I think, ironically, that a sensitivity to institutional factors may yield better theories of the West Rather than assume that the United States and Europe are the exemplars of advanced capitalism, the closest empirical instances of the idealized competitive market, Japan and other Asian nations are suggesting that the West is simply one form of capitalist economic development, an expression no doubt, of the West's own institutional heritage When we relinquish ethnocentric perspectives we can begin to look at ourselves and our own institutional heritage more clearly

Farrar's Company law

Abstract: "Incorporation and its consequences. The corporate constitution. Financial structure and membership. Corporate power and its regulation. Structural problems and change. Corporate collapse. The International dimension."

Corporate Governance and the Impact of Legal Obligations on Decision Making in Corporate Australia

Abstract: This paper reports upon an empirical study of the place of law and legal duties in the governance of Australian public companies. A fuller discussion of the findings from this empirical research project is to be found in: Tomasic and Bottomley, Directing the Top 500: Corporate Governance and Accountability in Australian Companies, (Sydney, Allen & Unwin, 1993). The debate concerning the legal duties and obligations of management of corporations became quite heated in Australia following the corporate excesses of the 1980s. Many corporations exploited the looseness of the legal rules for the control of business; weak regulatory structures also operated to the disadvantage of shareholders and creditors. The study is based upon data derived from a series of interviews conducted with officers from the top 500 Australian listed public companies. Interviews were held with 95 public company directors and 55 advisers of public companies. The adviser group comprised leading corporate lawyers, liquidators, auditors and corporate regulators. Interviews took place in five Australian state capital cities and all interviews were undertaken personally by the principal investigators. This article examines perceptions of corporate citizenship held by directors and goes on to contrast these with actual corporate decision making in the context of the legal requirements placed upon directors of Australian companies. The article also examines the structure of Australian corporate decision making processes by the board of directors.

A note on complex group structures, associated companies, and credit evaluation

Abstract: This paper provides case analyses which illustrate the opportunistic use of corporate group structure and method of accounting for associated companies to exclude financial results and engage in off-balance sheet financing. It also discusses general implications for accounting policymakers, and provides a number of specific suggestions for financial analysis and credit evaluation.

Hierarchies and Federations in the Post-war Era

Abstract: This chapter presents an overview of the development of resource allocation and the coordination of economic activity among large-scale companies in post-war Japan. We will examine particularly the business groups, which have been the major form of federation for the larger part of the period. Cartels were another form of federation, but they were related to particular groups of industries such as fabricated basic materials, and, therefore, are best be dealt with in later chapters.