Executive Defense

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 meet heightened financial expectations by reshaping their organizations. Michael Useem attempts to reveal how those shareholder pressures have transformed the inside structures of many corporations. 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, electronics, 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 sought legal safeguards against takeovers and board terms have been staggered. Companies have made significant commitments to building more effective relations with their major investors. As Useem demonstrates, this revolution has reached even beyond the corporation, influencing American politics and law. As new ownership alignment has caused companies to focus attention on shareholders, corporate political agendas have shifted from fighting government regulation to resisting shareholder intrusion. This book aims to be useful reading for managers, economists, lawyers, financial analysts, and all observers of American business.