Publication Type
Journal Article
Version
publishedVersion
Publication Date
5-2011
Abstract
This article investigates the effects of the changing institutional environment on strategic orientations of Japanese electronics firms during the 1990s. We examine the effects of three different types of shareholders on strategic directions of their invested firms. The first one, foreign portfolio investors, characterizes the emerging influence that pressed for change in corporate strategies. The two domestic shareholders, corporate investors and financial institutions, represent the conventional forces for continuity. Between the two domestic forces, though, while corporate investors attempted to maintain status quo, financial institutions have shifted towards market-oriented behaviour of investment. Specifically, we explore: (1) the influence of each type of shareholder on a firm's diversification strategy and capital commitment; and (2) the moderating effects of firm performance on the relationships between ownership structure and strategic choices. The results suggest that foreign investors prefer the focused product portfolio and conservative capital commitment. They also prefer the reduction of capital investment when the financial performance of their invested firms is poor. Domestic financial institutions are now similarly sensitive to the performance of their invested firms when those firms make strategic investments. By contrast, domestic corporate shareholders remain indifferent to performance, while they aim to maintain relational business ties with invested firms.
Discipline
Asian Studies | Strategic Management Policy
Research Areas
Strategy and Organisation
Publication
Journal of Management Studies
Volume
48
Issue
3
First Page
591
Last Page
618
ISSN
0022-2380
Identifier
10.1111/j.1467-6486.2010.00958.x
Publisher
Wiley
Citation
Colpan, Asli M.; YOSHIKAWA, Toru; Hikino, Takashi; and Del Brio, Ester B..
Shareholder Heterogeneity and Conflicting Goals: Strategic Investments in the Japanese Electronics Industry. (2011). Journal of Management Studies. 48, (3), 591-618.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/3139
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1111/j.1467-6486.2010.00958.x