Academic journal article Management International Review

Corporate Restructuring and New Forms of Organizing: Evidence from Europe

Academic journal article Management International Review

Corporate Restructuring and New Forms of Organizing: Evidence from Europe

Article excerpt


Over the 1980s and 1990s, companies across the globe have engaged in corporate restructuring activities. This raises the question as to whether corporate restructuring activities are similar across national boundaries, or whether patterns of corporate restructuring are related to national institutional contexts. It also poses the question as to the direction of changes: are companies restructuring towards new organisational forms, as has been claimed by some management authors?

The term corporate restructuring is slightly problematic to define. According to Bowman and Singh (1989), restructuring encompasses a significant and rapid change along one or more of three dimensions: assets, capital structure or management. A major problem defining the concept of restructuring is that there is 'a lack of systematic academic theory and evidence on the consequences of restructuring' (Singh 1993, p. 148). This holds especially for the third dimension of management.

A dominant feature in the literature on the dimension of management has been the discussion on the shape of the 'new organisation'. According to one persistent argument, we are currently witnessing a major break from the multidivisional form of organisation seen in the past. Emerging organisational forms, referred to alternatively as 'N-forms' (Hedlund 1994), cellular forms (Miles/Snow/Mathews/Miles/Coleman 1997) or the individualised corporation (Ghoshal/Bartlett 1997), would be characterised in particular by less horizontal and vertical differentiation, and by more ad hoc internal linkages. However, beyond certain well-known examples (e.g. the case of ABB in Bartlett/Ghoshal 1993), the incidence and international diffusion of these new organisational forms or new modes of organising have yet to be established.

Research on corporate restructuring has usually focused on one country (cf. Liebeskind/Opler/Hatfield 1996, Geroski/Gregg 1994), and cross-national research on corporate restructuring has remained relatively scarce (exceptions include Whittington et al. 1999a, Frese/Teuvsen 1999, Buhner/Rasheed/Rosenstein 1997). This may be due e.g. to the lack of access to comparable data sets, uncertainties in understanding foreign contexts, and the difficulties of conducting cross-national research (cf. Teagarden et al. 1995, Kohn 1996). Exploiting ties with six European business schools, this paper assesses patterns of corporate restructuring and changes in forms of organising over the 1992-1996 period, using the results of a recent European survey (Pettigrew/Whittington/Conyon 1995). We examine similarities and contrasts in the European evidence on restructuring, in order to assess whether new patterns of organising are emerging at different places, and at different paces across Europe. In doing so, we shall address some of the methodological problems associated with cross-national research.

The paper has the following structure. Section two briefly reviews the literature on corporate restructuring and new forms of organising. Section three discusses some of the methodological problems associated with cross-country comparisons, and with measuring and interpreting variation across boundaries. Section four introduces the survey and sample characteristics. Section five presents the major cross-European findings, and section six provides a summary and our main conclusions.

On Studying Corporate Restructuring and New Forms of Organising

North American and Western European scholars, politicians and managers have long tended to regard restructuring primarily as a temporary phenomenon. Restructuring in this view was a stage during which companies had to adjust to environmental changes such as slower growth, higher input prices (such as oil or labour) or competition from Asian economies. Events over the late 1980s and the 1990s have made this view untenable: with the ongoing economic and monetary integration in the European Union (EU), with discussions on further trade integration in the Americas and the North Atlantic Area, and with the Asian economic crisis, it seems safe to assume that numerous companies will continue to restructure over the coming years. …

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