This book analyzes how pressures from the capital market, through the bull market of the 1990s and the bear market of the early 2000s, have reshaped management action and calculation in large, publicly quoted US and UK corporations. Three detailed company case studies (General Electric, Ford and GlaxoSmithKline) illustrate and explore these themes using long run financial data and analysis of company and industry narratives. The text presents financial and market information about trajectory in an accessible way, coupled with an original interpretation of management actions and results.

List of exhibits and tables

vii

Acknowledgements

xiii

List of abbreviations

xv

Part I Giant-firm strategy and present-day capitalism: general argument and evidence

1

(146)

1 Overview

3

(18)

Object and approach of this book

3

(3)

Structure and argument

6

(7)

US and UK giant firms

13

(8)

2 Giant firms and classical strategy

21

(15)

A classical lineage

22

(4)

Firm in product market

26

(3)

Illustration and proof

29

(4)

Systematic empirics and refutation by events

33

(3)

3 Shareholder value: the intrusion of the capital market

36

(29)

When was shareholder value?

37

(7)

Value-based management (VBM)

44

(5)

Corporate governance

49

(5)

Value skimming and top management

54

(11)

4 Financialization and corporate performance

65

(34)

Political and cultural economy

66

(8)

Giant-firm value creation

74

(20)

Many moves and few levers

94

(5)

5 New interventions: sector matrix, restructuring, narrative and numbers

99

(48)

Sector matrix

100

(9)

'Restructuring'

109

(13)

Narrative and numbers

122

(15)

References for Part I

137

(10)

Part II Cases

147

(242)

1 GlaxoSmithKline: keeping it going?

149

(75)

Introduction

149

(3)

Industry frame: pharma's contested reputation

152

(16)

The pharma business model and the drugs pipeline

168

(12)

Glaxo: keeping it going

180

(15)

Company narrative: making promises

195

(6)

Between the future and the past: unresolved issues

201

(3)

References

204

(6)

Appendix

210

(14)

2 Ford: effort and reward

224

(75)

Introduction

224

(2)

Industry frame: visions of transformation

226

(8)

Analysts on car companies: how to beat the market

234

(13)

CEOs, strategized difference and enactment

247

(10)

Trucks and credit: innovation and financial results

257

(20)

Ford after Fordism

277

(4)

References

281

(4)

Appendix

285

(14)

3 General Electric: the conditions of success

299

(90)

Introduction

299

(4)

Industry frame: 'not a conglomerate'

303

(8)

Company narrative in media and business books

311

(12)

Deconstructing the numbers: a tale of two businesses

323

(13)

GE's undisclosed business model

336

(22)

Immelt: a new chapter

358

(6)

(Limits of) the GE way

364

(2)

References

366

(3)

Appendix

369

(20)

Index

389

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