A resource-based analysis of bankruptcy law, SMEs, and corporate recovery

The UK Company Voluntary Arrangement (CVA) is an early example of a bankruptcy regime designed to aid the rescue of financially distressed SMEs. Its efficacy hinges on its application to aid only viable companies with liquidation the preferred option for companies that are not viable. This paper proposes the resource-based view as a theoretical means to assess the viability of bankrupt SMEs. Seven hypotheses are tested and provide support for the central proposition, that a company which has resource strength, but is pushed into bankruptcy by temporary factors, is more likely to succeed in a CVA. The paper concludes that the resource-based view is useful for analysing the viability of bankrupt companies and that well-designed bankruptcy law can promote SMEs and entrepreneurship

The Clustering of Financial Services in London*

This paper reports a one-year study which investigated the clustering of financial services activity in London. A questionnaire asking about the advantages and disadvantages of a London location was sent to a stratified sample of 1,500 firms and institutions. In addition, thirty-nine on-site interviews with firms, professional institutions, government bodies and other related agencies were conducted. The study finds that banking, including investment banking, forms the cluster’s hub with most other companies depending on relationships with this sub-sector. Generally, the cluster confers many advantages to its incumbents including enhanced reputation, the ability to tap into large, specialized labor pool and customer proximity. The localized nature of relationships between skilled labor, customers and suppliers is a critical factor which helps firms achieve innovative solutions, develop new markets and attain more efficient ways to deliver services and products. Particularly important are the personal relationships which are enhanced by the on-going face-to-face contact that is possible in a compact geographical space. Many of the cluster’s advantages are dynamic in that they become stronger as agglomeration increases. The study also finds important disadvantages in the cluster which threaten its future growth and prosperity. These include the poor quality and reliability of transport, particularly the state of the London Underground and links to airports, increasing levels of regulation and government policy that is not co-ordinated with the whole of the cluster in mind. Key words: Industrial clustering, agglomeration, financial services.

Cultural and economic complementarities of spatial agglomeration in the British television broadcasting industry: Some explorations.

This paper considers the processes supporting agglomeration in the British television broadcasting industry. It compares and contrasts the insights offered by the cultural turn in geography and more conventionally economic approaches. It finds that culture and institutions are fundamental to the constitution of production and exchange relationships and also that they solve fundamental economic problems of coordinating resources under conditions of uncertainty and limited information. Processes at a range of spatial scales are important, from highly local to global, and conventional economics casts some light on which firms are most active and successful

The Economies and Diseconomies of Industrial Clustering:Multinational Enterprises versus Uninational Enterprises

This study’s objective is to compare cluster economies and diseconomies for multinational enterprises (MNEs) and uninational enterprises (UNEs) within the London financial services cluster. In contrast to the implicit assumption of the cluster participation literature that the economies and diseconomies of clusters are valued similarly by all firms, we find that economies relating to social capital and labour market pooling are equally important to MNEs and UNEs, economies relating to local competition and diseconomies relating to congestion costs are more important to MNEs than to UNEs, and economies relating to the reputational effects of locating in a world-leading cluster and access to specialised suppliers are more important to UNEs than to MNEs. That MNEs and UNEs do not experience cluster economies and diseconomies in the same way indicates that both cluster participation theory and international business theory need augmentation to recognise that cluster incumbents benefit and suffer from cluster membership differently

The creation of theory: A recent application of the grounded theory method

This paper outlines a particular approach to building theory that was employed in a recent doctoral research project (Pandit, 1995). Three aspects used in conjunction indicate the project's novelty: firstly, the systematic and rigorous application of the grounded theory method; secondly, the use of on-line computerised databases as a primary source of data; and, thirdly, the use of a qualitative data analysis software package to aid the process of grounded theory building

Some recommendations for improved research on corporate turnaround

Despite the frequent incidence of corporate turnaround and over two decades of research effort, our understanding of the phenomenon is very incomplete. A review of forty-seven studies of turnaround reveals two main reasons for this state of affairs. Firstly, problems with research design: the phenomenon has been poorly defined resulting in unrepresentative cases being selected for analysis; many important research questions have either been ignored or asked too infrequently resulting in explanations that are simplistic; and, the validity of the findings of qualitative studies is limited due, on the whole, to poor methodological execution. Secondly, investigations have largely been ad hoc in that they have either proceeded without a priori theoretical guidance or have failed to relate findings to extant theory ex post. Recommendations for future research based on stronger research designs and stronger theory are advanced in the hope that rapid advancement will ensue

Stages in the turnaround process: The Case of IBM UK

Whilst research on the content of successful turnaround strategies (‘what to do’) is common, research on the process by which such strategies are implemented (‘how to do it’) is rare. This paper attempts to redress this imbalance by developing a turnaround stages framework and then testing this framework against the case of IBM UK which experienced a now celebrated turnaround over the period 1988–1997. The framework proposes that successful turnarounds follow a generic five stage sequence characterised by performance decline that leads to a period of crisis which triggers radical change. The specifics of this radical change are embodied in a formal turnaround plan that, at an abstract level, and in a manner of taking one step back in order to take two steps forward, involves firstly emphasising retrenchment to achieve stability and subsequently shifting the emphasis towards profitable growth. When tested against the case of IBM UK, the framework is found to be robust and stable