A quiet revolution came to corporate America during the late 1980s and early 1990s. Large shareholders - pension funds, insurance companies, money managers, and commercial banks - exercised new-found muscle, pressuring senior managers to improve disappointing financial results by reshaping their organizations. Michael Useem reveals how those investor pressures have transformed the inside structures of many corporations, better aligning them with shareholder interests.
Useem draws on numerous sources, including interviews with senior managers and intensive studies of seven large corporations representing a range of restructuring experiences and industries - including pharmaceuticals, transportation, chemicals, retailing, and financial services. He shows that organizational changes have affected many areas of corporate life: headquarters staffs have been reduced, authority has filtered down to operating units, and compensation has become more closely tied to performance. Change also extends to corporate governance, where managers have fought back by seeking legal safeguards against takeovers and by staggering board terms. They've also put significant resources into building more effective relations with shareholders.
As Useem demonstrates, this revolution has reached beyond the corporation, influencing American politics and law. As increasing ownership concentration has caused companies to focus more attention on shareholders, corporate political agendas have shifted from fighting government regulation to resisting shareholder intrusion.
This book will be important reading for managers, economists, lawyers, financial analysts, and all observers of American business.
Industry Reviews
"Executive Defense" is an incisive account of the critical organizational changes that many publicly owned companies are making today. For example, either in response to investor urging or proactively, executives are restructuring the way they evaluate and manage managers to foster a mutuality of interests between employees and shareholders. Useem gives the reader a candid account of how companies are changing in this and other ways to increase their long-term value to shareholders.--Jack M. Greenberg, Vice-Chairman and Chief Financial Officer, McDonald's Corporation Michael Useem provides a wide-ranging and timely study of the rapidly shifting relations between major companies and large investors. "Executive Defense" reveals how companies are changing their organization, compensation, and governance in response to, and sometimes in anticipation of, the new institutional pressures. Whether you are an investor, manager, or observer, this book s insights are essential for understanding the changing face of ownership and management in American business.--Richard H. Koppes, General Counsel, California Public Employee's Retirement System" The last fifteen years have been momentous ones for large American corporations--downsizing, decentralization, globalization and ruthless combination have all occurred. Michael Useem shows how in this large-scale reconfiguration managerial interests have become increasingly realigned to match stockholder interests. The process has been painful and uneven in its realization. Nevertheless, he has shown how the managerial revolution has been redirected. Masterfully combining case studies and quantitative data, Executive Defense is an exciting study of recent corporate history.--Mayer N. Zald, University of Michigan Michael Useem provides a wide-ranging and timely study of the rapidly shifting relations between major companies and large investors. Executive Defense reveals how companies are changing their organization, compensation, and governance in response to, and sometimes in anticipation of, the new institutional pressures. Whether you are an investor, manager, or observer, this book's insights are essential for understanding the changing face of ownership and management in American business.--Richard H. Koppes, General Counsel, California Public Employee's Retirement System Executive Defense is an incisive account of the critical organizational changes that many publicly owned companies are making today. For example, either in response to investor urging or proactively, executives are restructuring the way they evaluate and manage managers to foster a mutuality of interests between employees and shareholders. Useem gives the reader a candid account of how companies are changing in this and other ways to increase their long-term value to shareholders.--Jack M. Greenberg, Vice-Chairman and Chief Financial Officer, McDonald's Corporation
