Competition and Change

Published by Taylor & Francis
Online ISSN: 1024-5294
Publications
Article
The 1990s are often described as the decade when the aerospace industry broke with the past. The drop in military orders that occurred early in the decade, the adoption in both the defence and civil markets of more competitive modes of regulation, the arrival at maturity of several big civil programmes and a host of privatisations – all had a durable impact on the aerospace industry in France. A general consensus exists about these changes, but few empirical studies have actually tried to measure the extent of their impact on the sector. To make up for this, we have carried out a statistical study of the structural transformations befalling the aerospace industry through the analysis of one specific problem: firms' internationalisation. We have used four databases, including for the first time the EEIG survey of intra-firm trade, to assess whether French firms did in fact deeply modify their internationalisation behaviour over the period 1993–99. We come to mixed conclusions, the suggestion being that what the sector experienced was more of an evolution than a major upheaval. Although certain components of firms' internationalisation trajectories were clearly altered (like the French State's presence in the sector or sales internationalisation), others evolved much more slowly (like foreign companies' penetration in France and French companies' productive internationalisation). Summarily, we can say that productive internationalisation remained modest in comparison with sales internationalisation.
 
Article
Why did CEOs remuneration exploded during the 90s and persisted to high levels, even after the bursting out of the Internet bubble? This article surveys the alternative explanations that have been given of this paradox mainly by various economic theories with some extension to political science, business administration, social psychology, moral philosophy, network analysis. Basically, it is argued that the diffusion of stock-options and financial market related incentives, that were supposed to discipline managers, have entitled them to convert their intrinsic power into remuneration and wealth, both at the micro and macro levels. This is the outcome of a de facto alliance of executives with financiers, who have thus exploited the long run erosion of wage earners'bargaining power. The article also discusses the possible reforms that could reduce the probability and the adverse consequences of CEOs and top-managers opportunism: reputation, business ethic, legal sanctions, public auditing of companies, or shift from a shareholder to a stakeholder conception.
 
Article
Governance indicators are now widely used as tools for conducting development dialogue, allocating external assistance and influencing foreign direct investment. This paper argues that available governance indicators are not suitable for these purposes as they do not conceptualize governance and fail to capture how citizens perceive the governance environment and outcomes in their countries. This paper attempts to fill this void by conceptualizing governance and implementing a uniform and consistent framework for measuring governance quality across countries and over time based upon citizens’ evaluations.
 
Article
This paper examines the many changes which have transformed the German system of corporate governance during the last seven odd years. It concludes that it is in the process of converging towards the Anglo-American system and that this has fundamentally affected the way strategic decisions are made in firms. Large, internationally oriented companies are particularly affected. But the notion of shareholder value and its many behavioural effects are gradually spreading also to other parts of the economy. Consequently, the distinctive logic, which had underpinned the German variety of capitalism during most of the post-war period, is eroding. This transformation is affecting also labour and industrial relations in negative ways. The argument is empirically substantiated with data about recent trends in capital markets, banks and firms. The paper theoretically examines institutional change, focussing on the notions of system logic and institutional complementarity. It examines both external sources of change and internal powerful actors who promote the process of transformation. The notion of hybridisation of the German business system is examined but is rejected in favour of a trend towards convergence. Convergence is not seen as a functional necessity, nor is it viewed as inevitable.
 
Article
The paper analyses the role of institutional investors in the car industry, using original data on their investments in the world\'s top 16 car companies. It reveals the limitations of \"globalised Finance\" in this sector and the permanence of national proximity. Institutional investors\' activities are then detailed: a typology is proposed to measure their concentration, and to characterise their dualistic nature. Consideration is given to their presence in carmakers\' ownership structures, and finally there is a discussion of their possible impact on industrial strategies.
 
Article
se’s 1937 paper on “The Nature of the Firm” formed the basis of the transaction-cost and internalization theories of transnational enterprises in the 1970s-1990s. These emphasized the problem of firms transferring intangible assets across national borders. Newer theories of the firm adopt resourcebased Penrosian, knowledge-based, capabilities and evolutionary perspectives, yet most continue to explain the international firm as a function of transaction-cost economizing. It is argued that Coase’s intention was to present a theory of the firm abstracted from its competitive environment. The application of this approach to a theory of the TNC is flawed because it cannot explain the TNC without reference to competitive conditions. This leaves us with incomplete theories of multinational firms in their competitive environments, because they address transactioncost problems and solutions to the exclusion of many other competitive considerations that must influence the transnational step in the firm’s evolution. The newer knowledge-based theories of the firm represent progress because they focus on the institutional details of dynamic firm creation of (investment in) the intangible or knowledge-based competitive assets by which firms transform their environments. For international firms, this has global consequences. Most recently, theory has begun to emphasize the advantages and not just the costs of internationalization. Additionally, the necessity to address the juxtaposition of internalization and externalization by global firms provides a context for creating a dynamic explanation of both. The key is to recognize the process of standardization as a part of the process of innovation at the heart of learningbased theories. This can help to explain the hierarchical division of labor both within and between firms.
 
Article
One of the most outstanding features of making politics in a shrinking world and interdependent economies is the creation of "International Policy Regimes" (IPR) for the governance of "micro" arenas of international politics. This is a stimulating development for comparative public policy analysts as it enables (and requires) us to extend our traditional cross-national, cross-sectorial and cross-issue analyses so as to include also a cross-international analysis. This paper compares two international policy regimes for the regulation of international competition in the sector of telecommunications. The first regime deals with the regulation of terminal equipment (type-approval processes) and the second with network interconnection (the integration of different and competing networks into one system). While the terminal type-approval regime involves deregulation, and was found to be narrow in scope and fairly effective, the network interconnection regime involves reregulation and was fo...
 
Fiat shares of domestic market, domestic registrations and export, 1965-1987.
Article
The paper addresses Fiat's lack of competitiveness in the medium and upper segments of the market. The main empirical finding is that the Italian company unsuccessfully tried to adjust the output mix upmarket as early as the 1970s. This attempt has not emerged from any previous account on Fiat, but it contributes to explain the failure of subsequent attempts to adjust the output mix upmarket in the 1980s and 1990s. The theoretical implication of the Fiat case concerns what in this paper is called 'intangible specialisation'. This concept revolves around the relationship between routines, path dependence and the uneven level of competitiveness of car manufacturers in the different sectors of the market. Intangible specialisation in the design of small cars locked the company in the lower end of the market and reduced the scope for output-mix flexibility in spite of the technical flexibility of Fiat's production technology.
 
Article
Research on industrial relations in MNCs remains limited to aggregate concepts and dominant actor groups. Focusing on a case study of the 2004 wildcat strike at GM Bochum, Germany, this paper argues for the inclusion of genuinely local, micro-level perspectives and marginalised actors. It makes use of an extended framework of actor embeddedness, which introduces interests and situations as core variables. The case analysis shows how diverging interests of Opel shop stewards, workers and works council members led to a multiplication of conflict lines and the development of competing rationalities within the workforce.
 
Article
In addressing the urgent task of formulating a regulation theory approach to the question of the European Union it is also helpful to examine closely related approaches. This article first undertakes a comparison between the American Social Structure of Accumulation Framework (SSAF) and the Regulation Approach (RA). A considerable convergence of the two approaches can be identified, especially in those works that maintain a commitment to foundational Marxian as well as Keynesian concepts. While European Union structures operate at a somewhat novel supra-national level, both the RA and the SSAF have developed in the context of analyzing specifically national economies. Thus both schools face a challenge in understanding the EU. Recent work within the SSAF that discusses accumulation at scales different from the national is reviewed including the 'spatialization school'. In addition, two perspectives from international political economy (IPE), specifically the new medievalism and Gramscian IPE are found to be helpful in approaching the globalization of economic governance of which the emerging EU structures are an example.
 
Article
First, this paper introduces a conceptual framework of analysis steeped in the statist approach to political economy — specifically, of a transformational view of the state. Second, a review of the status of competition law and policy in the World Trade Organization agreement focuses on its critical role in trade and competition policy across jurisdictions. Third, an explanation of the fundamental socio-economic philosophies embodied in the comparative national development of domestic competition law and policy, and its often conflicting role in national industrial policy and the cross-border merger and acquisition (M&A) review process, is undertaken. Fourth, predicated on the preceding two sections, a discussion ensues on the international business strategy threats inherent in a new trade 'protectionist' environment that focuses on an industrial policy which includes the criteria of competition law and policy (including the complications inherent in bilateral and multilateral competition policy review), national security policy, economic competitiveness policy, and cultural policy effects on cross-border M&A activity. In this paper's concluding section, arguments center on the present status and future of the 'murky protectionism' found in the international political economy environment of industrial policy now confronting cross-border M&A business strategy decisions, and its longer-term implications for encouraging foreign direct investment.
 
Article
Research on the competitiveness of regional clusters of firms in the same and related industries has been dominated by a profoundly optimistic view, concerned far more about the integrative possibilities of dense social networks than the dysfunctional consequences of such networks. I argue that this approach, which draws selectively on the transaction cost, knowledge-based and institutionalist perspectives, is one-sided in its fundamental premises, focusing on the presumed benefits of network homogeneity and coherence. It has led researchers to pay insufficient attention to the role of variations and imperfections in copying routines and competencies as a basis of cluster competitiveness. The evolutionary perspective calls into question the common view that competitive cluster network structures develop towards coherence and homogeneity. It views the cluster as a multilevel organizational system whose development is strongly influenced by variation generating processes at the micro-level. I discuss these processes, with special reference to competitive advantage, and outline some of the challenges they imply for empirical research.
 
Article
On the basis of a discussion of African production of clothing for the EU and US markets over the last decade, this paper examines the influences of culturally-specific conventions of industrial organization and quality on GVC governance, entry barriers and suppliers' upgrading possibilities. The paper argues that, while US and EU conventions and governance forms are becoming more similar, neither financialization nor MFA phase-out have led to an eradication of differences in the shape of clothing production and trade into these markets. The trend is rather for existing differences to be reproduced in new forms, rather than being eradicated.
 
Article
The rapid spread of Chinese clothing exports globally is analysed with respect to their competitiveness and welfare industrial policy dimensions, using a framework of complementary/competitive relationships and direct/indirect impacts. The dynamics governing the South African clothing sector, the role of retailers in driving domestic value chains, and the reasons for the huge increase of Chinese clothing imports is discussed. The significant welfare benefit of cheap clothing imports for consumers is detailed. The impact on local manufacturers, forcing them to meet the competitiveness challenge and upgrade their production capabilities, as well as the policy challenges this creates for local producers, is explored.
 
THE RELATIVE SIZE OF THE AMP AND SANLAM
THE BANKING INTERESTS OF MAJOR SOUTH AFRICAN INSURERS
A SUMMARY OF FIRM-, MARKET-AND COUNTRY-SPECIFIC FACTORS INFLUENCING THE DECISION TO Demutualize Sanlam AMP
Article
Since the 1980s a wave of demutualizations has occurred across the financial services sector from stock exchanges to building societies, savings and loans associations and insurers. In both Australia and South Africa, this has had a marked effect on the life insurance markets that had been dominated by mutual life insurers for 150 years. This article adopts a case study approach to analyse the key drivers of organizational change. It examines the experiences of the Australian Mutual Provident (Australia's oldest and largest life insurance mutual) and Sanlam (the second-largest mutual life office in South Africa) as they proceeded down the path to demutualization. Firm-specific, market-specific and country-specific forces are identified as placing pressure on existing mutual structures.
 
Article
This article examines the introduction of shareholder value in the German business system. Its main argument is that the idea of shareholder value has been introduced and adopted in different ways by German firms. Divergences are identified both at the discursive level and at the level of organisational structures and practices of corporate governance. They can be understood by applying translation theory to the adoption process. The main tenet of translation theory is that ideas are constantly being modified when they enter new contexts, mainly due to the diversity of actors involved in the process of translation. Translation theory therefore goes beyond traditional diffusion studies, which tend to assume a linear and homogeneous transmission of ideas. The analysis of two German firms, DaimlerChrysler and Volkswagen AG, lends support to the explanatory potency of translation theory.
 
Article
Many critical commentators view the current crisis and the attendant legitimacy problems for free-market capitalism as an opportunity to make the case for financial re-regulation, i.e. a reassertion of public values against globalising markets. This paper suggests that such assessments of the political possibilities offered by the subprime crisis rest on a misappraisal of its nature and, more broadly, the nature of the neoliberal era. It argues that the financial expansion of the past decades cannot be adequately understood in terms of the state's failure to regulate financial markets. Financial growth has not involved the retreat of public institutions, the dissolution of social bonds or an emptying out of subjectivity, but has rather been a process whereby new organisational linkages were forged, particular norms and relations of institutional control were constructed and complex identities with thoroughly interlinked emotional households were created. Through a historical interpretation of the development of American finance since the New Deal, the paper outlines how the reconfigurations of neoliberalism have not reduced but enhanced the institutional capacities of the American state, as well as the leverage and power resources available to those who enjoy privileged access to the state's organisational mechanisms. It then returns to the question of the political significance of the current crisis, suggesting that to seize on the change in ideological climate to advocate increased state control over financial life is likely to come down to supporting the restoration and fortification of an infrastructure of financial power that we criticised when it still went under the ideological banner of neoliberalism.
 
Article
This paper develops a state- and regulation-theoretical approach to the European Union as an emerging political system and its role in promoting economic growth. Based on critical reviews of alternative theoretical positions, it argues that: (a) the emerging Europolity is a crucial political site in an evolving system of multi-scalar meta-governance, organized in the shadow of post-national statehood, of the contradictory and conflictual processes of Europeanization in a still emerging world society; (b) the Europolity is a key element in an ongoing transition from different forms of Keynesian welfare national state to different forms of Schumpeterian workfare post-national regime, with the EU having a major role in promoting the knowledge-based economy and the modernization of social policy through new forms of economic and political organization; and (c) an important element in this new role for the Europolity is the open method of coordination, which can nonetheless be seen as flawed, for reasons that in part affect most forms of governance in capitalist societies and in part are specific to the open method of coordination in a European context.
 
Article
Free trade agreements (FTAs) have become a defining feature of the world trade system, expanding rapidly in number since the end of the Cold War and particularly in the Asia-Pacific, a region that was hitherto largely devoid of FTA activity. The nature of FTAs is also changing. Most incorporate a range of 'trade plus' measures that extend the reach of these agreements into various realms of commercial regulation, embodying specific rules on intellectual property, investment, government procurement, competition policy, and other areas of commercial practice. With conventional trade barriers (e.g. tariffs) continuing to fall and hence becoming less significant, the commercial regulatory provisions of FTAs have gained greater prominence. This article considers whether 'freer trade' in the early twenty-first century is increasingly concerned with setting the appropriate regulatory parameters to foster open market competition, but also competition on the regulatory terms of dominant FTA partners. The analysis centres on seven types of 'influence effect' associated with FTA commercial regulation, in broad terms relating to determining the liberalization embodied in agreements, shaping the domestic policy domain of FTA partners, affecting the relationship between FTAs and World Trade Organisation (WTO) accords, conferring regulatory preferences and free-rider advantages to trade partners, exhibiting cross-agreement regulatory influences, and exposing fundamental conflicts of interest on economic and social governance issues.
 
Article
The economic position of small-scale developing country farmers has been observed to weaken in many global agri-food chains. Several studies in the global commodity chain tradition suggest that recent consumer trends in developed country markets are the ultimate cause. However, these studies have not come up with a conceptual framework in which the effects of changing consumer preferences on farmer earnings can be explicitly analysed. This paper makes a first attempt towards building such a framework by drawing mainly on Lancaster's product characteristics approach. Within this framework it is shown how enhanced consumer-orientation in the global food system leads to adverse power shifts for small farmers in low-income countries. As signalled by previous global commodity chain studies, smallholders in developing countries will face growing inequality in intra-chain surplus distribution as well as a higher risk of exclusion from global agri-food chains. We discuss how thinking in terms of product characteristics may also help smallholders to reap a larger share of the surplus in the chain.
 
Evolution of partnerships in the production of new models
Embraer's strategy for the acquisition and development of technology
Article
What are the factors that allow for success or failure of developing countries' attempts to enter high-tech sectors? We make a initial attempt to answer that question through a comparative study of success and failure in manufacturing aircraft. Aircraft production is one of the key industries in the world today, as reflected in the intense Boeing-Airbus rivalry. It is also one of the most cyclical, technologically-sophisticated, and capital-intensive industries, and therefore an unlikely place for a developing country to compete. But almost from the birth of modern commercial aircraft manufacturing, Argentina's Fábrica Militar de Aviones (FMA) was at the forefront of production. Brazil's aircraft industry was tiny in comparison at that time. Yet, by the 1990s, Brazil's Embraer had become the world's third largest aircraft manufacturer, while the Argentine aircraft industry has virtually disappeared. We examine the history of each company to explain the differences in trajectories and their fates. Our analysis demonstrates that an evolutionary but consistent partnership between state and firm, one attuned to both the exigencies of sectoral development and to changes in the nature of global markets, is necessary for success.
 
Article
In recent years, many South American countries have moved from policies embracing neo-liberal, market-based economic policies to those supporting nationalization of industries and the re-institution of trade barriers (to protect domestic industries). This paper first addresses the concept of "globalism", efforts at globalization of trade, and development of free markets in South America since the 1980s. Second, it reviews regional trade agreements, with a focus on Mercosur, the most important regional trade organization. Third, it discusses recent trends in South America's nationalization of industries. Fourth, a political risk analysis of future free trade and foreign direct investment in the region is undertaken. Fifth, conclusions and recommendations are offered, including: 1) the effects of increased government control of the economy may result in full-member status countries in Mercosur becoming less attractive as host nations for foreign direct investment, while conversely, non-full members may become more attractive; 2) center-left governments, unlike those embracing orthodox socialist policies, are not instituting policies discouraging foreign direct investment; and 3) where there are instances of host country expropriation of private property (without fair market compensation), a robust corporate policy of pursuing claims (with home country support) through the International Centre for Settlement of Investment Disputes is recommended.
 
Article
This paper asks, what can account for the rapid expansion and growing profitability of the US credit card industry since the mid-1980s? And, what does this mean to the study of global finance within IPE? It is argued that the advent of asset-backed securities, a financial innovation known as securitization, was the key to the enormous expansion of credit card profits and the continued proliferation and growth of the credit card market in the US. This is because securitization moved credit card receivables off-balance sheet, allowing loan pools to be re-capitalized, lowering the cost of borrowing and increasing revenues from payments on securities issued. This financial innovation attracted non-banks, mostly large MNCs, into the credit card market, facilitating greater integration between finance and the 'real' economy. The deepening integration facilitated mounting competition and lower costs of borrowing and was the catalyst for the rapid expansion of the credit card market and its unsurpassed profitability.
 
Article
Informed by and contributing to approaches to finance that draw on Foucault and actor-network theory, the paper focuses on the contemporary transformation of Anglo-American mortgage finance. This transformation is understood to entail the lengthening of mortgage networks and their increased interconnection with the multiple networks of the capital markets; the making of suburban subjects as property investors in order to produce and extend mortgage borrowing in a booming housing market; and, in particular, the constitution of mortgage-backed securitisation (MBS) techniques through the calculative tools of off-balance sheet accounting, asset management, and credit rating. MBS is the practice of 'bundling' together a stream of future obligations arising from mortgagors repayments to provide the basis for the issue of, and the payment of principal and interest on, securities.
 
The Washington Consensus and the Anti-Washington Consensus
Article
The term 'Washington Consensus', as Williamson the father of the term conceived it, in 1989, was a set of reforms for economic development that he judged 'Washington' could agree were required in Latin America. However, the Washington Consensus has been identified as a neoliberal manifesto and as a consequence an anti-Washington Consensus was initiated, as calls were made for the establishment of a different set of policies, such as the 'Post-Washington Consensus', 'Washington Contentious' and 'After Neoliberalism'. Lately, even Williamson has come up with a new set of policies, 'After the Washington Consensus'. The aim of this paper is to investigate the different interpretations and alternatives of this controversial set of policies, and to reveal that the evolution of the debate conceptualizes the evolution of economic thought regarding the required policies for economic development.
 
The interlinkages of the textile and apparel industries. 
Apparel exports from West Europe, North America and East Asia (1970-2000). 
Apparel exports from developing regions (1970-2000). 
Article
Focusing on the apparel industry, this article contends that the global manufacturing context increasingly obliges developing countries to construct or promote regionalised production sites aiming to capitalise on local institutional assets. The dissemination of standardised business practices and procedures by leading multinational firms to their main suppliers has played a critical role in driving this trend. Changes in recent decades in global apparel production as well as new, high-tech systems of supply-chain management are compelling retailers to source from local 'clusters' of interrelated firms and institutions. At the same time, this trend may contradict the key contentions of the locally-oriented cluster approach because the adoption of similar apparel contracting, assembly and delivery procedures in diverse developing regions can undercut the logic of emphasising local institutional assets. The rising importance of inter-linked clusters in the global apparel industry supports theoretical conceptualisations that integrate the global value chain and cluster perspectives and delineates how the spread of similar logistics and supply chain management practices by multinational retailers and buyers shape development strategy and, therefore, development prospects.
 
Article
The recent financial crisis has been punctuated by a discussion of the future of global financial governance in terms of a 'regulation/deregulation' formula. This paper argues for a broadening of this frame by taking seriously recent claims of performativity. To place changes associated with financial globalization in a more complicated critical context, this paper explores the ways in which global finance has often entailed a redrawing of the boundaries between the financial and the everyday. To develop this argument, the paper focuses, in particular, on practices of payday lending and on recent regulatory changes which have performed payday lending in a particular set of ways. Reading payday lending as both a repertoire of market devices and a set of dividing practices, this paper concludes that regulation performs the object it seeks to manage by invoking ambiguous, and not singular, territories of governance.
 
Article
This paper accords derivatives a central role in defining the character and dynamics of financialised accumulation. Under the guise of financial precision and a progressive innovation spiral, financial derivatives have instrumentalised risk so that ownership and property take a novel form. The advent of limited liability and absentee ownership in the second half of the nineteenth century marked the start of this process of transformation. At that stage, ownership became fleeting and its relationship to the underlying technical process uncertain, loose and complex. Risk management through derivatives takes this a stage further. Derivatives imply that ownership can take a form wherein there are no direct ties to a particular asset, and therefore no possibility of a conceptual link between property and stewardship. Instead, ownership proceeds on the basis of disengagement and financialisation proceeds via the construction of indifference to the exigencies of 'real' economic competition.
 
Article
The analysis of the contemporary phase of internationalisation implies an assessment of the diverse processes of regional integration. They are key issues in the construction of post-Fordist regimes that can no longer be developed on strict national bases. Internationalisation is also stemmed by directly global developments interacting with regional processes. This paper identifies two ideal types of regional dynamic, which together account for the economic, politic and social dimensions of these processes. In each case, I specify the regional dynamics of convergence or divergence and discuss their stability. I then investigate how interactions with global trends can lead to hybrid forms of regions.
 
Article
There is growing evidence that consolidation in consumer goods industries, with increasingly integrated production and distribution systems between large retailers and contractors, may be increasing the degree of vertical integration in global supply chains. While the growing size and power of large retailers is well recognized, little attention has been paid to a related phenomenon: the growth of giant contractors, based in East Asia, that are producing much of the world's consumer goods. This paper argues that the growth of large contractors may partially address the power asymmetry between 'big buyers' and their suppliers, as well as provide an avenue for the latter to move up into higher value-added activities. The emergence of giant factories may also favor labor militancy, both because of the opportunities they afford for coordinated actions among workers, and because work actions can be more disruptive of global supply chains.
 
Article
Russian energy behavior is examined with regard to the oil, electricity and gas sectors in each of the Central Asian states, and each state's responses to that behavior. The contention is that the Central Asian states, in spite of disarray in the energy sectors, have attempted to develop strategies which treat energy as a strategically sensitive commodity, and account for Russia's interests while protecting their own. The adaptive capacity of the Central Asian states varies from state to state – but also from sector to sector, and the article examines why that has been the case. The analysis concludes with an exploration of how Russia's energy strategies in Central Asia may fit into the wider context of Russia's market and political strategies.
 
Article
This article seeks to demonstrate the use of superfactuals combining structural repertoires and product units for analyzing the elective affinities between corporate strategic choices and their contexts, typically national domestic contexts. By focusing on Rover, the producer of quality saloon cars within the British Leyland galaxy, this article develops the following superfactual proposition: 'Even if British Leyland focused on quality saloon and sports vehicles, the British-owned car industry would have suffered terminal failure.' On this basis, the article develops a new counterfactual proposition: 'Had Rover sold its saloon operations to British Leyland while focusing on the production and development of its 4WD products, the company would have probably survived as a British-owned concern.' The perspective of structural repertoires in a morphological perspective provides a sound basis for actionable strategic knowledge, especially when combined with superfactuals and counterfactuals.
 
Article
The main argument in this article is that there is no one production system that characterizes the German model and that has provided a long-lasting, stable solution to the problems of the German automobile industry, in particular the high cost structure. A core element of the German model debate is the concept of diversified quality production (DQP). In the 1980s the German car-makers followed the DQP orientation of diversifying product range, aiming at non-price competitive market segments and organizing production on the basis of skilled labour. These strategies, however, had hidden structural problems which became apparent during the crisis in the early 1990s. This forced the companies to develop new strategies that were only partially complementary with DQP and had their own inherent problems. The dynamics of change in the automobile industry have not been adequately reflected in the debate on national models.
 
Article
Using case study material on French pharmaceutical firm Sanofi-Aventis, this article aims to elaborate on recent criticisms of the varieties of capitalism (VoC) perspective. The article claims that the VoC approach is not so much 'wrong' as limited, both by its narrow focus on the national and its exclusive concern with mapping national institutional organization. The article highlights the important role of sectoral and global institutions, and discusses the difficulty of reading firm strategy directly from national institutional change, when ownership and personnel changes often provide senior management with greater autonomy to pursue divergent strategies which are difficult to generalize from the national level. In the case of Sanofi, the article finds that, whilst domestic institutional shifts explain the timing of the company's strategic change, sectoral and global institutions play a more important role in understanding the form and direction of that change. Meanwhile, Sanofi's PDG, Jean-François DeHecq, drew on non-national institutions — notably US- and UK-based institutional shareholders who bought the new share issues, and foreign investment banks which brokered acquisitions — to operationalize a discretionary strategy of expansion in the US market. The article argues that VoC's emphasis on national institutional configurations fails to adequately engage with these complexities. Further, it presents empirics on Sanofi's geographical accumulation and reinvestment of profit, which highlights how funds generated in the US were recycled in France to support well-paid research and manufacturing jobs. The article concludes that Sanofi is better thought of as part of a disorganized but interconnected economic world, where firms operate as a kind of conduit for cross-subsidy between national social settlements. This requires us to question VoC's emphasis on national complementarities and encourages us to think divergently about the degree of separateness between national capitalisms.
 
Article
With the People's Republic of China flush with US foreign reserves generated from a significant trade imbalance with the United States (US), Chinese firms have begun to exercise foreign direct investment by acquiring US corporations. Considering the emerging military threat of China in the Pacific Rim area and economic issues involving the under-valuation of the Chinese yuan, this investment diversity strategy (beyond US Treasury debt) has resulted in serious questions being raised about whether national and economic security is at risk if these business transactions were to be consummated. Consequently, the Committee on Foreign Investment in the United States (CFIUS), the federal oversight commission reviewing the appropriateness of such transactions, has come under intense Congressional scrutiny. After evaluating the literature concerning the operations and performance of CFIUS, it is recommended that CFIUS share its operational performance on a quarterly basis with select committees in the US Congress; that mandated filings of specific categories of defense-related acquisitions be authorized; and that both CFIUS and the US President (and not the US Congress) continue to define what is 'national security'.
 
Article
This paper uses the financial and economic downturn widely dated back to summer 2007 to develop understandings of financial elites in London's international financial district. Drawing on empirical research conducted into fee earning investment bankers and social scientific research into elites and power relations, I focus on the different modalities of power associated with the changing nature of these 'financialised elites'. I argue that in contrast to earlier generations of financiers, the power of contemporary investment bankers emerges through their role choreographing transnational networks of financial actors associated with securitised and structured products rather than being purely read off their social or education background. I suggest that these networked forms of power relation are significant because, on the one hand, they have prevented investment bankers distancing themselves from the ongoing turbulence and uncertainty within the international financial system. Meanwhile, on the other hand, the ability of investment bankers to (re)produce such networks indicates that suggestions of the demise of 'financialised elites' in the wake of the global credit crunch may be too hasty as previous financial crises demonstrate the considerable ability of 'financialised elites' to seize moments of conjunctural opportunity to reinvent themselves through new financial products and organisations.
 
Article
This paper reports the findings from five case studies on Danish-owned subsidiaries in China and India and demonstrates how a subsidiary's issue-selling strategy influences its bargaining power in intrafirm competition within a multinational corporation. Issue-selling strategies of subsidiaries involve various activities aiming at (a) making the parent company understand an issue, (b) attracting parent-company attention to an issue, and (c) lobbying for an issue at the parent company. Next to illustrating these activities, the empirical part of the paper shows that subsidiaries managed by parent-company nationals have more bargaining power than subsidiaries managed by host-country nationals. To begin with, parent-company national subsidiary managers are better at translating the context-specific information deriving from cultural distances between the parent company and the subsidiary. Second, they are better at packaging the issue in order to match parent-company formalised application requirements. Further, they are better at framing the issue to match the parent-company goals and objectives. And last, they often have closer relationships with decision makers within the parent company.
 
Article
This paper serves as an introduction to a special issue which explores many new questions, intellectual and political, posed by the current global financial crisis. The aim is to get beyond the convention asking the well-rehearsed questions about what caused the crisis, or why the established theories could not predict it. For we can safely predict that many critical thinkers in political and cultural economy already know, or think they know, the answer to what caused the crisis. This is because they will construct the origins and causes of the within the problematic which they endorsed before the crisis began. Namely, that neoliberalism demarcates the period since 1970 as one of privatisation, liberalisation and support for free markets which essentially takes ideological propositions at their own word and, consequently, fail to distinguish between rhetoric and practice. This special issue explores some new ways of fundamentally reconsidering or challenging established ideas about neoliberalism and finance. For financialisation researchers, the intellectual struggle against organising concepts of neoliberalism and disembedded finance is unfinished business.
 
Article
This paper discusses the challenges to Regulation Theory (RT) that are presented by post-national modes of accumulation. It begins by introducing to RT's core analytical foundations a mode of social regulation and its explanation of the regime of accumulation. The paper then examines how, despite clear asymmetries, the stability of the international system supported domestic accumulation. Because of this, RT only really addressed the international from the perspective of the nation state, and with only limited engagement with North–South issues. While some authors did address the international system, the greater instability of the 1970s combined domestic regime change with greater international insecurity. Up to the collapse of the Berlin Wall, new political ideologies and economic ideals challenged the nation-based Keynesian compromise while greater trade from the South and greater financial liberalisation fundamentally altered the international environment. Various approaches to the post-Fordist international regime are discussed, including that of a financial regime, and the conclusion identifies some of the areas for future research.
 
Article
Viewed in retrospect, the concept of 'financialization' highlights the massive growth in the issue and trading of ownership claims on all manner of instruments. It has also opened the way for research linking these changes in the financial markets to disciplinary transformations in corporate management and governance. There are, however, future prospects for financialization research once the concept is re-worked from a cultural political economy perspective and changes in the financial markets are linked to the consumer credit boom in Anglo-American economies. Grounded in the calculative creation and management of default risk by lenders, markets for asset-backed securities and credit derivatives have emerged that trade claims on the future repayments of borrowers on car loans, credit cards and so on. Disciplinary transformations also arise in everyday financial self-government. Thrift and prudence are no longer paramount in extending individual freedom and security, but are displaced by the responsible and entrepreneurial meeting, management and manipulation of outstanding obligations.
 
Article
Despite sound macroeconomic fundamentals, the Brazilian currency, the real, experienced one of the world's largest exchange rate depreciations during the recent international financial crisis. This depreciation resulted from Brazil's rising 'international financialization', i.e. the increased participation of foreign investors in short-term domestic Brazilian assets. One important manifestation of this process, in particular, was the increased internationalization of the Brazilian real, which has become one of the most widely traded emerging-market currencies. However, the rising influence of international investors on Brazil's domestic currency weakened its exchange rate management during the international financial crisis as rapid international portfolio adjustment led to the real's sharp depreciation. Such exchange rate volatility has important implications for macroeconomic policy, especially exchange rate management, since, in the presence of increased international financialization, the standard prudent macroeconomic management that has been advocated by mainstream economics will prove inadequate — and might even undermine efforts — to maintain financial stability.
 
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The central concern of Global Commodity (or Value) Chain analysis is to identify upgrading possibilities for poor country (or region) producers as a mechanism for accelerating local-level development. Whilst the framework has made impressive progress in explaining how chain governance impacts upon suppliers' upgrading opportunities it has been relatively weak in integrating local-level institutions into its analysis and policy advice. This paper addresses this weakness by focusing on the interaction between suppliers' organisations and state development agencies in facilitating systematic upgrading for large numbers of producers. It is based on research on export grape production in North East Brazil, and finds that whilst exporters may be particularly well informed about changing market and buyer requirements, state agencies play a key role in both establishing initial conditions of production and assisting producers to overcome evolving technical gaps generated by fast-changing markets.
 
Article
This paper criticises the tight association in the political economy literature of speculation with liberal forms of governance. Having emphasised liberalisation, it is argued, scholars who ascribe to such a view are too often left without an institutional account of speculative dynamics. The paper then sets out the foundation for a political economy of speculation; one which emphasises the various forms speculation has taken and how these are rooted within specific institutional structures. In order to do so, the paper develops a distinction between premodern and modern speculation and uses it in order to contrast British and American finance. This contrast then serves as a basis for challenging the idea that speculation emerges from liberal forms of governance.
 
Article
Countries around the world are developing carbon emission markets as a governance mechanism to reduce greenhouse gas emissions and mitigate anthropogenic climate change. These markets are social institutions, designed to solve the transnational collective action problem of climate change. This paper explores the development of carbon emission markets from an institutional perspective to understand how market networks specifically and social institutions in general are constructed. Drawing on seminal work of institutional theorists and economic sociologists, this paper explores the way in which organizations build the institution of the carbon markets. As this paper aims to demonstrate, a number of public and private organizations, rather than regulatory bodies, build and operationalize the market. The paper analyses how networks of organizations develop the three pillars of the carbon market institution: regulative, normative and cultural-cognitive constructs. Since organizations build the institutional pillars of the carbon market network, the strength of the institution cannot be determined by regulation alone. Certainly regulation gives the carbon markets credibility, but their ability to become an institution of common practice relies on the strength and embeddedness of the organizations that build them. The paper concludes by suggesting that, while the carbon market institution serves to communicate and disseminate a common social value of reducing emissions, it generates a dangerous over-reliance on markets to address environmental concerns.
 
Article
This article reveals how business historians, analysts and managers tackle the key subject of business performance, and identifies the tensions between the principal approaches. Particular attention is devoted to Chandler, Porter and the FMA literature, financial measures, and broader measures, including benchmarking and performance indicators. The conclusion is that historians provide historical assessments that contrast with the more predictive measures of economists and analysts. It is argued that business historians, who emphasise profits, survivability and adaptive capability, can inform the strategic decision-making of the contemporary business manager.
 
Article
This paper pinpoints important differences within the private sector in Vietnam. It shows that the country's private sector is much more heterogeneous than is often suggested, and attempts to reveal some of the causal mechanisms that cause this diversification. Theoretically, the paper draws on business system theory, particularly on that aspect of it that deals with internal business organisation, in order to examine the nature of and trends in relation to firm-level management and control. On this background, the paper uncovers a Vietnamese-owned segment in Hanoi, two different Vietnamese-owned segments in Ho Chi Minh City distinguished by the origins of their owners, and a Vietnamese Chinese-owned segment in Ho Chi Minh City.
 
Article
This article is intended as the introductory chapter to the special issue on Business History and its Value for Managers, which also includes contributions from Peter Clark, Terry Gourvish, John Wilson and Andrew Thomson. Maielli's contribution identifies some of the main components of the Business History research agenda and analyses whether and to what extent they might contribute to the development of actionable knowledge for business decision making. After setting the theoretical framework, the article analyses the other contributions to the issues and their implications with regard to the relevance of Business History for managers. While Wilson and Thomson support History of Management as a core component of Business Management academic curricula, Gourvish confines the main cognitive domain of Business History in the analysis of the past. Finally, Clark and Maielli see History acting 'under cover' at the core of many disciplinary approaches, inspiring interdisciplinary research agendas and the development of analytical tools for decision making.
 
Article
In this article, an argument is presented for the return of labour to centre stage in the critical study of transition. The transition to capitalism in Eastern Central Europe generally, and Poland in particular, is discussed and the negative social impacts of transnational capital in post-communist development and the reconstitution of the Polish state in favour of (transnational) capital interrogated, through an exploration of the ever-deeper embedding of neoliberalization. There has been a reworking of the institutional infrastructures where the communist and post-communist political economy was grounded and transnationally oriented social forces in the EU continue to export the core of the neoliberal deregulatory programme to the east. Enlargement measures have further embedded a highly selective application of Europeanisation in what is becoming an increasingly vituperative variant of neoliberalism. The article concludes by assessing the recent neo-populist turn in Poland and how this might be reconciled with neoliberal strategies.
 
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