No abstract

No abstract

This article investigates the effects of the changing institutional environment on strategic orientations of Japanese electronics firms during the 1990s. We examine the effects of three different types of shareholders on strategic directions of their invested firms. The first one, foreign portfolio investors, characterizes the emerging influence that pressed for change in corporate strategies. The two domestic shareholders, corporate investors and financial institutions, represent the conventional forces for continuity. Between the two domestic forces, though, while corporate investors attempted to maintain status quo, financial institutions have shifted towards market-oriented behaviour of investment. Specifically, we explore: (1) the influence of each type of shareholder on a firm's diversification strategy and capital commitment; and (2) the moderating effects of firm performance on the relationships between ownership structure and strategic choices. The results suggest that foreign investors prefer the focused product portfolio and conservative capital commitment. They also prefer the reduction of capital investment when the financial performance of their invested firms is poor. Domestic financial institutions are now similarly sensitive to the performance of their invested firms when those firms make strategic investments. By contrast, domestic corporate shareholders remain indifferent to performance, while they aim to maintain relational business ties with invested firms.

This chapter examines the historical origins, evolutionary paths, and long-term resilience of diversified business groups in the economies of Western Europe, North America, and Oceania from the nineteenth century to the present. In examining the developmental dynamics of diversified business groups in those economies, it aims to propose a new interpretation of the long-term evolution of large business enterprises in different market and institutional settings. The chapter suggests that diversified business groups are not simply transitional and second-best organizations that worked well only at the early phase of modern economic growth and will not necessarily become an obstacle for dynamic industrial development as the economies mature. Instead, as the business groups flexibly co-evolve with changing market and institutional environments, they can stay on as a viable model for business organizations even in developed markets.

No abstract