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Contests for Corporate ControlCorporate Governance and Economic Performance in the United States and Germany$
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Mary O'Sullivan

Print publication date: 2001

Print ISBN-13: 9780199244867

Published to Oxford Scholarship Online: November 2003

DOI: 10.1093/0199244863.001.0001

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US Corporate Responses to New Challenges

US Corporate Responses to New Challenges

(p.186) 6 US Corporate Responses to New Challenges
Contests for Corporate Control

Mary O'Sullivan

Oxford University Press

The growing demands for financial liquidity, combined with the productive challenges discussed in the previous chapter, created significant pressures on the stability of the post‐war system of managerial control in the USA. In the 1980s and 1990s, the US corporate economy reacted to these combined pressures in what, in historical perspective, were dramatic ways. The most striking dimension of the general corporate response was the growing propensity of US corporations in that period to downsize their workforces and to distribute corporate revenues to stockholders. The strategy to ‘downsize and distribute’ stands in contrast to the historical norm for these corporations of favouring the retention of corporate revenues for reinvestment in plant, equipment, and personnel. This chapter has two main sections that (1) address the factors that underlay the prevalence and persistence of strategies to downsize and distribute among US corporate enterprises, and (2) assess the implications of the strategies to downsize and distribute.

Keywords:   corporate governance, corporate revenues, downsizing, financial liquidity, financial pressure, history, managerial control, market competition, production, revenue distribution, stockholders, USA

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