Corporate Restructuring: Managing the Change Process from Within by Gordon Donaldson

From the Publisher

The corporate leaders of the 1960s and 1970s came of age in the Great Depression and served their business apprenticeships in the post-World War II era - a time of stress, uncertainty, and disruption. Not surprisingly, their business strategies were conservative, characterized by a combination of diversification, low debt, and high retained earnings. Although these strategies resulted in redundant assets and excess debt capacity, they served corporations well - and were applauded by investors, analysts, and the business press. In the 1980s, however, institutional investors increasingly replaced individual investors, creating a dramatic change in the financial environment. Institutional investors lacked the loyalty to any particular organization since they invested in a portfolio of companies and focused purely on returns. Accordingly, they had little tolerance for firms with underutilized resources, and insisted - through the market - that firms release them to the shareholders for investment elsewhere. Indeed, many in the financial community felt that an actual or threatened takeover was necessary to compel managers to restructure and become efficient, agreeing that hostile takeovers were the inevitable result. In Corporate Restructuring: Managing the Change Process from Within, Gordon Donaldson contradicts the conventional wisdom that outside intervention is necessary to compel managers to act, demonstrating that companies can restructure voluntarily. He begins by looking back at previous decades to probe why the successful strategies of earlier decades became such a compelling target of reform in the 1980s. He explains why the financial structure that may have been right in the 1960s and 1970s suddenly became wrong for the 1980s, creating opportunities for corporate raiders. Then, drawing on the experiences of twelve well-known public corporations - including Armco, Safeway Stores, and Household International - he shows how firms have implemented radical cha

Publishers Weekly

In the 1980s, the business world saw a number of gargantuan mergers and acquisitions featuring ``white knights,'' convoluted ``poison pill'' and ``PAC-Man'' defenses and ``barbarians at the gates'' that transformed business. Donaldson ( Strategy of Financial Mobility ) meticulously explores resultant restructuring in this superb study. The author, an emeritus professor at Harvard Business School, views the last decade's changes in corporate restructuring in the context of the ``evolution of financial strategy and structure since World War II.'' He examines the economic structure of the 1970s and 1980s, investor discontent, voluntary and involuntary corporate restructuring, board revolts and fundamental changes in managerial operations. Donaldson's extensive use of statistical data, case studies (General Mills, Burlington Northern and CPC International) offers a useful framework for his consideration of implications for corporations of the '90s (Apr.)

Booknews

Donaldson (corporate finance emeritus, Harvard Business School) contradicts conventional wisdom that outside intervention is necessary to compel managers to act, demonstrating that companies can restructure voluntarily. Drawing on the experiences of 12 well-known public corporations, he shows how firms have implemented radical change through an internal discipline. In detailed case histories of three of these corporations--General Mills, Burlington Northern, and CPC International--he reveals the process of structural change that each has undergone. Annotation c. Book News, Inc., Portland, OR (booknews.com)

Product Details

• Table of Contents

Table of Contents