Edward H. Bowman

Does corporate strategy matter

A revisionist view that corporate strategy does not matter has gained considerable influence in recent years. This view largely stems from empirical results of early variance decomposition studies that found negligible corporate effects associated with profitability differences between businesses. Our analysis of the variance decomposition literature shows this view to be incorrect. Not only do the studies as a group show that factors at the corporate level of organizations contribute to profitability differences, but also evidence suggests that factors specifically associated with corporate strategy contribute to corporate effects. Corporate strategy in fact does matter. Copyright

When Does Restructuring Improve Economic Performance

Corporate restruauring has been the focus of much debate in the past few years. This article addresses the debate about the effectiveness of corporate restructuring by examining 52 studies presented within 25 research articles on restructuring and its impact on economic performance. The authors distinguish three forms of restructuring: financial, portfolio, and organizational. Based on the research reviewed here, financial restructuring has the highest positive impact on performance, followed by portfolio restructuring. Organizational restructuring has little consistent impact on performance.

US institutional investors look at corporate governance in the 1990s

In the US and elsewhere, shareholdings in corporations have become more concentrated in the hands of institutional investors. Paradoxically, the latter have not increased their power over management. But in the US a lively debate has begun on the topic of corporate governance. Michael Useem, Edward Bowman, Jennifer Myatt, and Craig Irvine present the results of an extensive survey of US institutions in three main areas: investor relations with management, shortcomings of the present governance system, and anticipated trends in shareholder activism. In general, institutional investors are expected to redouble their efforts to make company directors more independent of managers and more accountable to owners.

Deep-draft dredging of U.S. coal ports: A cost-benefit analysis

This article discusses whether U.S. society should invest in large-scale coal port development and examines specifically financing the deep-draft dredging of coal ports on the East and/or Gulf Coasts (Baltimore, Hampton Roads, Mobile, and New Orleans) so that fully loaded, large coal-carrying colliers can export coal to Western Europe. By assuming a society-wide perspective, no costs and benefits are attributed to various parties. Although the multifaceted nature of the coal port issue is acknowledged, the core of this study is a large number of different simulations. Each simulation “optimizes” the United States-Western Europe coal trade for a given demand, ocean transportation cost structure, and cost of capital. This relatively simple model focuses on the key tradeoff: the cost of dredging versus lower ocean transportation costs. The study supports those recommending caution in coal port development. The most striking conclusion is the robustness of two solutions - no dredging or dredge only Hampton Roads - depending on the assumptions. Our conclusions also generally do not support simultaneously dredging all deep-draft options, the concurrent dredging of more than one port, or dredging either of the Gulf ports before the two East Coast ports.