Most studies of industrial restructuring and regional adjustment are focused upon the local consequences or causes of restructuring. Few studies are focused upon corporate strategy, an essential ingredient for a better understanding of the motive forces behind restructuring. This paper is an attempt to redress the balance, beginning with the relationship between structure (the inherited configuration of production) and strategy (the design and implementation of restructuring). As part of this analysis, three types of strategy are distinguished: structure-dependent, structure-limited, and structure-focused strategies. To appreciate better the connection between the choice of strategy and corporate form, a series of models of corporate control are developed that distinguish between ownership and management. These preliminary arguments are then used to analyse the scope of sunk costs—that portion of fixed costs which are non-recoverable. To illustrate the scope of the framework used, recent examples of restructuring from northeast Asia and North America are interpreted in the light of the analytical model.
Get full access to this article
View all access options for this article.
References
1.
AlchianA, 1950, “Uncertainty, evolution and economic theory”Journal of Political Economy58211–221
2.
AndrewsK R, 1971The Concept of Corporate Strategy (Dow Jones—Irwin, Homewood, IL)
3.
BairdD, 1991, “Fraudulent conveyances, agency costs, and leveraged buyouts”Journal of Legal Studies201–24
4.
BairdDPickerR, 1991, “A simple noncooperative bargaining model of corporate reorganisations”Journal of Legal Studies20311–350
5.
BarnesT, 1992, “Reading the texts of theoretical economic geography”, in Writing Worlds: Discourse, Text and Metaphor in the Representation of the Landscape Eds BarnesTDuncanJ (Routledge, Chapman and Hall, Andover, Hants) pp 118–135
6.
BaumolWPanzorJWilligR, 1988Contestable Markets and the Theory of Industry Structure2nd edition (Harcourt Brace Jovanovich, New York)
7.
BeauregardR (Ed.), 1989Economic Restructuring and Political Response (Sage, Beverley Hills, CA)
8.
BerleA AMeansG, 1968The Modern Corporation and Private Propertyrevised edition (Harcourt Brace and World, New York)
9.
CarltonDPerloffJ, 1990Modern Industrial Organization (Scott, Foresman, Glen view, IL)
10.
ClarkG L, 1992, “‘Real’ regulation: The administrative state”Environment and Planning A24615–628
11.
ClarkG L, 1993a, “Costs and prices, corporate competitive strategies and regions”Environment and Planning A255–26
12.
ClarkG L, 1993bPensions and Corporate Restructuring in American Industry: A Crisis of Regulation (The Johns Hopkins University Press, Baltimore, MD)
13.
ClarkG LMcKayJMissenGWebberM J, 1992, “Objections to economic restructuring and the strategies of coercion: An analytical assessment of policies and practices in Australia and the United States”Economic Geography6843–59
14.
CLR1991, “The erroneous site selection requirement for arranger and transporter liability under CERCLA”Columbia Law Review912074–2096
15.
CoffeeJ C, 1991, “Liquidity versus control: The institutional investor as corporate monitor”Columbia Law Review911277–1368
16.
CollisD, 1991a, “Bearings: The visible hand of global firms”, mimeograph (Harvard Business School, Boston, MA)
17.
CollisD, 1991b, “Corporate strategy: A research agenda”, mimeograph (Harvard Business School, Boston, MA)
18.
DickenPThriftN, 1992, “The organisation of production and the production of organisation: Why business enterprises matter in the study of geographical industrialisation”Transactions of the Institute of British Geographers: New Series17279–291
19.
FinneSLaulajainenR, 1992, “Gaming in spatial expansion tracks: The case of the Swedish brewery industry”Environment and Planning A241021–1037
20.
FriedmanJ W, 1991Game Theory with Applications to Economics (Oxford University Press, Oxford)
21.
GauthierD, 1986Morals by Agreement (Oxford University Press, Oxford)
22.
GhemawatP, 1991Commitment: The Dynamics of Strategy (The Free Press, New York)
GilsonS, 1989, “Management turnover and financial distress”Journal of Financial Economics25241–262
25.
HardinR, 1988Morality and the Limits of Reason (University of Chicago Press, Chicago, IL)
26.
HayD AMorrisD J, 1991Industrial Economics and Organisation2nd edition (Oxford University Press, Oxford)
27.
HermanE, 1981Corporate Control, Corporate Power (Cambridge University Press, New York)
28.
HoK C, 1993, “Industrial restructuring, the Singapore city-state, and the regional division of labour”Environment and Planning A2533–51
29.
HoshiTKashyapAScharfsteinD, 1990, “The role of banks in reducing the costs of financial distress in Japan”Journal of Financial Economics2767–88
30.
HovenkampH, 1991Enterprise and American Law 1836–1937 (Harvard University Press, Cambridge, MA)
31.
JacksonFPettitP, 1992, “Structural explanation in social theory”, in Reduction, Explanation and Realism Eds CharlesDLennonK (Clarendon Press, Oxford) pp 97–131
32.
JensenMMecklingW, 1976, “Theory of firm: Managerial behavior, agency costs, and ownership structure”Journal of Financial Economics3305–360
33.
JordeTTeeceD J, 1992, “Innovation, cooperation, and antitrust”, in Antitrust, Innovation, and Competitiveness Eds JordeTTeeceD J (Oxford University Press, New York) pp 47–81
34.
KrepsD, 1990, “Corporate culture and economic theory”, in Perspectives on Positive Political Economy Eds AltJShepsleK (Cambridge University Press, New York) pp 90–143
35.
LuiT LChiuS, 1993, “A tale of two industries: The restructuring of Hong Kong's garment-making and electronics industry”Environment and Planning A2553–70
36.
MarglinS, 1974, “What do bosses do? The origins and functions of hierarchy in capitalist production”Review of Radical Political Economy633–60
37.
PorterM, 1990The Competitive Advantage of Nations (The Free Press, New York)
38.
PrattJZeckhauserR, 1985, “Principals and agents: An overview”, in Principles and Agents: The Structure of Business Eds PrattJZeckhauserR (Harvard Business School, Boston, MA)
39.
RoeM J, 1991, “A political theory of American corporate finance”Columbia Law Review9110–67
40.
Rose-AckermanS, 1991, “Risk taking and ruin: Bankruptcy and investment choice”Journal of Legal Studies20277–310
41.
SchellingT C, 1960The Strategy of Conflict (Harvard University Press, Cambridge, MA)
42.
SchoenbergerE, 1991, “The corporate interview as a research method in economic geography”The Professional Geographer43180–189
43.
ShubikM, 1982Game Theory and the Social Sciences: Concepts and Solutions (MIT Press, Cambridge, MA)
44.
SimonH, 1985, “Human nature in politics: The dialogue of psychology with political science”American Political Science Review79293–304
45.
SteinA, 1990Why Nations Cooperate: Circumstances and Choice in International Relations (Cornell University Press, Ithaca, NY)
46.
SuttonJ, 1991Sunk Costs and Market Structure: Price Competition, Advertising and the Evolution of Concentration (MIT Press, Cambridge, MA)
47.
TribeL, 1989, “The curvature of constitutional space: What lawyers can learn from modern physics”Harvard Law Review1031–39
48.
UngerR M, 1987False Necessity: Anti-necessarian Social Theory in the Service of Radical Democracy (Cambridge University Press, Cambridge)
49.
WalkerR, 1989, “A requiem for corporate geography: New directions in industrial organisation, the production of place and uneven development”Geografiska Annaler B7143–68
50.
WebberM J, 1993, “Enter the dragon: Lessons for Australia from northeast Asia”Environment and Planning A2571–94
51.
WebberM JClarkG LMcKayJMissenG, 1991, “Industrial restructuring: Definition”, WP-91-3, Monash—Melbourne Joint Project on Comparative Australia—Asian Development, Development Studies Centre, Monash University, Clayton, Victoria
52.
WilkinsD, 1992, “Who should regulate lawyers?”Harvard Law Review105799–887
53.
ZeckhauserR (Ed.), 1992Strategy and Choice (MIT Press, Cambridge, MA)
