Competitive collaboration & market contestability: Cases in Mexican & UK banking (1945-1975)

This research explores the evolution of co-operation among different types of intermediaries in the UK and Mexican financial systems and provides an international comparison. In it we focus on how and why collaboration between commercial banks and non-bank financial competitors emerged in the context of the external innovations that modified the contestability of bank markets. Changes in Mexican banking consider collaboration between commercial banks and small regional banks, with an emphasis on the 1945 to 1975 period. The success of collaboration, between non-bank and non-finance providers to modify competitive capabilities and competitive challenges, in UK deposit markets is the benchmark for co-operation in Mexican banking. Business histories in the UK and Mexico show how some relations emerged out of integration strategies, with the purpose of establishing financial conglomerates. Other banks and non-bank providers in Mexico and the UK sought to create co-operative agreements that developed competitive capabilities and allowed barriers to enter deposit markets to be circumvented. As a result, the research sheds light on the success of collaboration agreements through changes in competitive strength rather than the longevity of the transaction or the formality and structural visibility of the agreements.Comparative Financial Markets (N20), Market Structure (L10), Networks (L22).

GlaxoSmithKline: A merger too far?

This teaching case study summarises events leading to the creation of a global pharmaceutical giant and the early years of its performance while inviting readers to consider the process of growth through mergers and acquisitions as a general strategy. The case also looks at the expectations, deliberations and motivation of managers and stakeholders in doing so. The case invites readers to reflect on whether more mergers are to be the future of GlaxoSmithKline.

Lying in Business: Insights from Hannah Arendt’s ‘Lying in Politics’

The famous political philosopher Hannah Arendt develops several arguments why truthfulness cannot be counted among the political virtues. This article shows that similar arguments apply to lying in business. Based on Hannah Arendt’s theory, we distinguish five reasons why lying is a structural temptation in business: business is about action to change the world and therefore businessmen need the capacity to deny current reality; commerce requires successful image-making and liars have the advantage to come up with plausible stories; business communication is more often about opinions than about facts, giving leeway to ignore uncomfortable signals; business increasingly makes use of plans and models, but these techniques foster inflexibility in acknowledging the real facts; businessmen fall easily prey to self-deception, because one needs to act as if the vision already materializes. The theory is illustrated by a case study of Landis that grew from a relative insignificant into a large organization within a short period of time, but ended with outright lies and bankruptcy.Lying;deceit in business;Hannah Arendt;image-making;self-deception;accounting fraud;politics and business;Landis

The Global Financial Crisis And After: A New Capitalism?

The 2008 global financial crisis was the consequence of the process offinancialization, or the creation of massive fictitious financial wealth, that began in the1980s, and of the hegemony of a reactionary ideology, namely, neoliberalism, based on selfregulatedand efficient markets. Although capitalism is intrinsically unstable, the lessonsfrom the stock-market crash of 1929 and the Great Depression of the 1930s weretransformed into theories and institutions or regulations that led to the “30 glorious years ofcapitalism” (1948–77) and that could have avoided a financial crisis as profound as thepresent one. It did not because a coalition of rentiers and “financists” achieved hegemonyand, while deregulating the existing financial operations, refused to regulate the financialinnovations that made these markets even more risky. Neoclassical economics played therole of a meta-ideology as it legitimized, mathematically and “scientifically”, neoliberalideology and deregulation. From this crisis a new capitalism will emerge, though itscharacter is difficult to predict. It will not be financialized but the tendencies present in the30 glorious years toward global and knowledge-based capitalism, where professionals willhave more say than rentier capitalists, as well as the tendency to improve democracy bymaking it more social and participative, will be resumed.

Real options analysis as a decision-making tool - A preliminary investigation of the real estate investment executive perspective

This paper attempts to identify literature where real options analysis (ROA) has enhanced real estate investment analysis and decision-making as well as to conduct a preliminary investigation of how ROA is known and perceived by senior real estate investment executives. The research is carried out as an exploratory study where the data for the research is gathered via semi-structured interviews with senior executives in real estate investment companies. All of the interviewees expressed that they would welcome ROA into their investment decision process and into the industry as a general method. The results indicate that the findings from earlier often theoretical ROA research do have practical interest, which hopefully encourages researchers to study the topic further together with practitioners. The perceived complexity of real options valuation could be overcome by communicating the benefits of ROA with results where the option values are transparent approximations. The interviews focusing on the role of ROA in investment decision making process with real estate investment executives are the first of its kind and provide new understanding regarding both the overall potential of ROA for real estate investments as well as where the next research questions should focus, especially concerning the practical viability of the method

"The Global Financial Crisis and a New Capitalism?"

The 2008 global financial crisis was the consequence of the process (1) of financialization, or the creation of massive fictitious financial wealth, that began in the 1980s; and (2) the hegemony of a reactionary ideology-namely, neoliberalism-based on self-regulated and efficient markets. Although laissez-faire capitalism is intrinsically unstable, the lessons of the 1929 stock market crash of 1929 and the Great Depression of the 1930s were transformed into theories and institutions or regulations that led to the "30 glorious years of capitalism" (1948–77) and that could have helped avoid a financial crisis as profound as the present one. But it did not, because a coalition of rentiers and "financists" achieved hegemony and, while deregulating the existing financial operations, refused to regulate the financial innovations that made these markets even riskier. Neoclassical economics played the role of a meta-ideology as it legitimized, mathematically and "scientifically," neoliberal ideology and deregulation. From this crisis a new democratic capitalist system will emerge, though its character is difficult to predict. It will not be financialized, but the glory years' tendencies toward a global and knowledge-based capitalism in which professionals have more say than rentier capitalists, as well as the tendency to improve democracy by making it more social and participative, will be resumed.Financial Crisis; Neoliberalism; Deregulation; Financialization; Political Coalition

The influence of competition environment and strategic orientation on investments: Survey of companies operating in Finland

OBJECTIVE OF THE STUDY: Market environment confronted by companies comes as given, and to overcome the challenges in the industry, companies aim to fit their strategy according to the competition. Strategies alone lead nowhere. Successful strategy requires concrete actions. For concrete actions to be possible, they require investments, for example to marketing, to different projects, to digitalization of products and services, and most of all, to personnel to carry out all those tasks. This research aims to investigate the relationship between challenges in the market environment and companies' investments. METHODOLOGY: This research applied data collected from 109 companies, which are belonging to 250 largest companies operating in Finland. Two multivariate techniques were used to analyze the data. First, factor analysis was conducted in order to define the underlying dimensions of competition environment and strategic orientation. Second, regression analysis was performed to study the relationship between those underlying dimensions and company investment orientation. FINDINGS: The factor analysis revealed 4 factors of which 3 were identified as competition environmental factors and one for strategic orientation factor. Factors found were technology turbulence, market turbulence, competition intensity and service improvement orientation. After identifying different underlying dimensions, these factors were subjected to multiple regression analysis to further investigate the relationship between those dimensions and different investment orientations. In the multiple regressions analysis, correlations were found between those factors and investments in 'Market research and competitor analysis', 'Product or service improvement projects', 'Digitalization of products and services', 'Marketing communication and promotions' and 'Staff development'

Rebuilding Corporate Leadership: How Directors Can Link Long-Term Performance with Public Goals

This report examines how efforts to build public trust and long-term value have coalesced to encourage many large, global corporations to pay greater attention to their longer-term interests by striking a balance between short-term commercial pursuits and such societal concerns as the environment, labor standards, and human rights. Many companies have also found ways to turn such concerns as the effects of climate change and other environmental damage into profitable commercial opportunities. This report also explores how all corporate boards could take a more active part in considering such issues and improving the reporting of financial and non-financial measures of corporate performance broadly conceived. In our view, directors could do more with their current authority to motivate managements to greater innovation, and to support managements in finding long-term value solutions to the numerous economic and societal pressures they face

Micro-strategies of Contextualization Cross-national Transfer of Socially Responsible Investment

This paper examines how individuals select and mobilize local institutions when they transfer business practices across societies that are construed as dissimilar to one another. We investigate empirically how the American business practice of socially responsible investment (SRI) was transferred to France and Quebec. Our analysis identifies five micro-strategies that were employed to contextualize SRI, namely filtering, rerouting, stowing, defusing, and coupling. This repertoire of micro-strategies extends previous research on contextualization, translation, and institutional transfers and links them to one another. They may also help explain why some transfers succeed while others fail.Contextualization; transfer; translation; institutional theory; socially responsible investment