Book Essay

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Financialization and Strategy This book analyzes the impact of capital market pressures on giant-firm strategy in the US and UK since the early 1980s. It explains how classical strategy, including Porter and Prahalad & Hamel, has been preoccupied with the product market so it cannot engage with how financialization has changed what giant firms say and do. A n extended introduction presents compelling evidence which shows that the pressure for 'shareholder value' in the 1990s did not lead to any great improvement in performance in groups of giant firms like the FTSE 100 or the S&P 500. The beneficiaries were not shareholders but managers who used corporate governance reforms and the bull market of the 1990s to claim large pay increases. M ore fundamentally, the book argues that giant-firm strategy has been transformed: the narrative and performative elements of strategy, along with corroborating financial numbers, have become much more important. This point is developed and demonstrated through case studies of three companies (General Electric, Ford and GlaxoSmithKline) which use long run financial data and analysis of company and industry narratives to explore these themes. T he result is an innovative account of the limits of management action in a corporate world where managers find it easier to put together narratives than to deliver improved performance. It offers innovative business analysis which uniquely combines and counterposes empirical evidence on firm trajectory and financial results with new kinds of cultural analysis. F inancialization and Strategy offers a distinctive, critical account of what corporate management has become in large UK and US corporations. It will be an invaluable resource for practitioners and academics with

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