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TRANSFORMATIVE BRAND AND ORGANIZATIONAL COMMUNICATION 173 price whatever marketing people are selling it for, that is the price that the market is willing to pay. So either you have to make changes and improve the product or reduce the cost or you can get lost. And there was always reluctance on the part of R&D or design engineering here to say that this is not possible, that is not possible. So I told them this is possible. You only have to start thinking then it becomes possible. So if necessary I will get some outside consultants to help you. Then finally they thought that they could do it, so whatever changes marketing demanded in the product were all made, simultaneously our people were ready to look into what cost they could produce. And they were able to reduce cost. Each vibrator compactors cost was reduced by 2025 per cent. That is how this unit has become profitable. And we have also arrested the increasing cost on the backloader. Selling prices have not been increased by a single paisa (cent) in the last three years So in real terms there has been a decrease in selling price but still we have become an organization which is making profits. As another element of grassroots entrepreneurial leadership, Raghavan emphasized the innovative role of workforce managing the top management. Specifically, the compensation package at the Pithampur-based joint venture was lower than the all-India L&T levels, because Pithampur was a backward area where the plant had been set up with the help of government incentives. Raghavan observed the following regarding the challenges involved in bringing the compensation at par with the mainstream national levels of the company: There was a thinking that since we are going to backward areas so we should be able to pay less to people. Again it was a paradigm which had to be converted into an upper echelons of L&T management, so that had to be done. It was a signal to people, if you perform well you will get as much as people elsewhere in L&T are getting. Raghavan has signaled a strong message that the biggest change the workforce can expect in the coming years is to be confident that if they wanted to make any changes they could do them. As the CEO, he has been trying to bring about positive transformation in the employees mental attitudes and paradigms. The sales of the venture he heads reached $20 million in 2000 and was expected to grow by nearly 50 per cent in 2001. EFFECTIVENESS OF ENTREPRENEURIAL LEADERSHIP AT L&T Raghavans induction of entrepreneurial leadership culture at all levels at the joint venture is reflective of a new mood of optimism that pervades L&T. Though characterized as an old economy firm, L&Tlike several others of the so- called traditional Indian firmshas been quite successful in the new era of economic liberalization. Currently, 60 per cent of its revenues come from construction and engineering business, and another 25 per cent from cement, with the rest from diverse businesses such as electrical line, with an order book of more than $ 1.25 billion. Table 9.1 provides details of the sales and unit sale realizations for various core products. The firm has invested 75 per cent of its capital in the cement business where it shares market leadership with Gujarat 174 TRANSFORMATIVE ORGANIZATIONS Ambuja Cement. Most of the L&T clients are in traditional industries, including oil/gas, hydrocarbon, cement, fertilizer, food, paper, steel plants, thermal and hydroelectric power plants, turbo generators, and railway electrification. Table 9.1: Sales Performance of Core Products for L&T, India Year Ending March 1998 March 2001 Sales Value (Rs. billion)* Cement making machinery 1.8 1.5 Chemical plant and machinery 4.4 3.4 Earthmoving machinery 2.4 8.8 Equipment for nuclear projects 2.7 10.2 Industrial machinery 1.8 0.8 Portland cement 12.9 21.9 Switchgear 3.3 3.2 Sales volume(unit) Cement making machinery (Nos) 4.0 3.0 Chemical plant and machinery (Ton) 18,116.0 9,462.0 Earthmoving machinery (NOS) 668.0 5.0 Equipment for nuclear projects (Ton) 10,062.0 13,486.0 Industrial machinery (Ton) 13,006.0 6,499.0 Portland cement (Ton) 6.6 11.3 Unit realization (Rs million/unit)* Cement making machinery (Rs/machine) 456.5 520.9 Chemical plant and machinery (Rs/Ton) 0.2 0.4 Earthmoving machinery (Rs/machine) 3.6 175.2 Equipment for nuclear projects (Rs/Ton) 0.3 0.8 Industrial machinery (Rs/Ton) 0.1 0.1 Portland cement (Rs/Ton) 1,964.5 1,940.1 *: Rs. 45 ~ US$1 To sustain its productivity the firm has taken several initiatives including benchmarking with global players, focucing on world-class delivery standards and emphasis on risk management. In addition, it has made cost control through greater localization its top priority, and has pledged to bring out new products and improve response time. Culture management has been identified as the basis for all these dimensions of corporate strategy, and is reflected in remarkable openness to all self-change initiatives of the workforce as well as recommended policy changes from the workforce. Consistent with its openness of culture for human resources, L&T has also committed to embrace best practice corporate governance systems, through sharing information with the shareholders about new performance measures including returns for each division. L&Ts new transformative philosophy, as exemplified by Raghavan, is for top management to seek constant interaction with every line person and the unions, and to identify opportunities for continuous training programs specifically tailored to the middle level people to facilitate their interactive role TRANSFORMATIVE BRAND AND ORGANIZATIONAL COMMUNICATION 175 with the unions and the workers. The interactive philosophy is rooted in the emphasis on deep understanding of the corporate strategy and future direction, having a sound perspective of what the unit should be five to 10 years down the line from now; what it should be doing, what kind of product lines it should be looking at all becoming part of a long-term orientation for the people in the firm. Such an enlightened perspective is deemed critical to the firms ability to know about new product lines and for its expansion in the competitive era. Willingness to listen to people is deemed a key strength for the top management personnel, along with a long-term perspective, both oriented towards change for the betterment, rather than acceptance of no to the possibility of improvement and development. The top management fosters an informal culture, and maintains an open door policy for any employee seeking to discuss any matter, even if there is another meeting going on. The company often supports its philosophy through an advertisement called People the Prime Movers. In addition, all managers are deeply immersed in the values shown in the corporate video excerpts of Danish founder, Mr Larsens, philosophy who maintained that ultimately business is all about people. If you dont have good people doing good work, investments in machinery and materials are all a waste. In short the case of L&T highlights how the firms need to contextualize their change management script, in order to enact entrepreneurial leadership at the grassroots level that is capable of responding to the emergent changes and of leading the organizational change. Such cultural contextualization may be critical not just for transforming the old economy firms, but also for restructuring and reviving the ailing new economy upstarts. Conclusions In this chapter, we emphasized that it is quite difficult, for most emerging mar- ket firms to compete just on the symbolic brand value, since the multinational firms have highly recognized brand equities, which are reinforced through heavy advertising and sponsoring of major events such as sports and entertainment that are core to the psyche of the local culture. Similarly, it is difficult for the emerging market firms to compete just on quality and innovation, because smaller scale of operations makes the investments into quality and innovation difficult to recoup compared to the multinational enterprises, whose operational and technological costs are spread over their entire worldwide networks. Therefore, it is essential to transform brand communication externally, and organizational communication internally. Externally, the brand symbolism should be aug- mented using functional excellence. Internally, functional excellence should be integrated with innovation and quality through transformation of organizational communication, and recognition of entrepreneurial leadership potential of the workforce. It is important that the transformation of communication is sustainable, and not just superficial. For instance, many firms have traditionally equated buzz marketing with just celebrity endorsements. They spend several hundred 176 TRANSFORMATIVE ORGANIZATIONS millions of dollars to have star celebrities, such as Michael Jordan in the US, and Sachin Tendulkar, Saurav Ganguly, and Virender Sehwag in India, endorse their products, and to create awareness in the minds of hundreds of millions of middle class consumers. The underlying belief is that 1 mega-star celebrity would influence 1 million fans, and those 1 million fans would then influence at least 100 million mass consumers that have a financial capacity to purchase the product. However, real buzz marketing is about using vernacular language, vernacular operatives, and vernacular humor and settingsthe arenas where the emerging market firms should excel. In the 1960s when Honda Motors had to build its brand in the US it barely had money to support the visit of its two employees to the US to find channel partners (Pascale, 1996). However, the conventional channels for distributing bikes were not interested in Hondas bikes, because the principal user segment was the street-smart gangs who wanted sturdy and durable products. The bikes that some of the American distributors agreed to carry were large in size, and had little quality or competitive edge compared with the state-of-the-art models of the western companies in that product category. Further, those distributors had a high bargaining power, and did not pay for the product until after they actually sold the bikes, thus putting severe strain on the already thin financial reserves of Honda Motors in its heydays. Barely able to survive, its two employees visiting the US began using the smallest bikesfor which the conventional channels indicated no interestfor their day- to-day purchases of food and other functional necessities. The simple and light small bikes invoked great interest among passers-by, particularly among the female and child audience, and induced sports bike stores and mass retailers such as Sears to order those bikes with advance dollar payments. A new mass market was created overnight, and a college student at the University of California Los Angeles decided to even write the marketing term paper on Honda, coining a phrase you meet the nicest people on Honda. The phrase went on to become an instant rage in initial advertising, even without any celebrity endorsement, and soon turned Honda into a market leader among the Japanese automotive companies in the US, leaving more prestigious playersToyota and Nissan far behind. The companies around the world are beginning to appreciate the upside of new buzz marketing. In 2001, Italian company Vespa hired friendly male and female models to hang out on scooters outside cafes and nightclubs in Los Angeles, so that the passers-by might ask about that cool bike, and could learn all about Vespa and where to buy it. Another company, Big Fat Inc. of the US works for clients such as Nintendo and Nike, and sends undercover employees to restaurants and shopping centers, who pose as regular customers and make loud comments about the taste and quality of the clients toys, shoes, beverages, and other products with a view to creating curiosity and interest among those around (Gaffney, 2001). Joachimsthaler and Aaker (1997) emphasize that with growing media clutter, mass advertising is losing its effectiveness. The old model of strategic brand manager who sat in the office and strategized about allocation of ad budgets to build identities of different brands, is no longer working well. New information TRANSFORMATIVE BRAND AND ORGANIZATIONAL COMMUNICATION 177 channels, such as the Internet, are emerging that allow the customers to bypass advertising as they pursue information, entertainment and shopping options. Further, powerful retailers are trying to introduce their own private label products, thereby usurping the benefits of mass advertising through their point- of-purchase promotional efforts. In this environment, European companies have fared better in many arenas as compared to the American counterparts. In Europe, the availability of mass media marketing has been relatively limited compared to the US, because of the existence of several languages, and the cost of that mass media advertising has been rather high. Therefore, European firms have sought to rely more on alternative media for building their brands. The case of Swatch in the Swiss watch industry is instructive. Until the 1960s, watches were timeless timepieces; but during the 1970s and early 1980s, Japanese firms had captured the mass market through a concept of watches as low-cost time measurement pieces. Consequently, the Swiss firms that dominated the watch industry until the 1960s lost most of their market share to the Japanese firms. In 1983, SMH launched Swatch brand as fashion watchesan affordable line of watches with a stylish, fun, youthful and joyful personality, backed by Swiss quality and precision. The company linked its new selection of watches to carefully selected events, such as Halleys Comet, opening of Eastern Europe, and United Nations summit on environment in 1992. Some of its limited edition watches even became collectors items, fetching enormous prices in the auctions. It also launched new watches matching seasonal fashions and colors each year, making Swatch the best selling watch brand by 1992. However, without a pulse on consumer behavior and values, the alternative brand building vehicles rarely succeeda fact that gives a unique advantage to the emerging market firms in the use of such vehicles vis-à-vis multinational firms. Consider the case of Italian company Benetton. Benetton had grown rapidly since the 1960s by focusing on high visibility publicity on issues such as youth, cultural diversity, and world peace. In the 1980s, Benetton supplemented the word of mouth with a strategic use of media ads, which substantially enhanced its market penetration. However, during the 1990s, Benettons ads began using controversial themes, such as a nun kissing a handsome priest, which began alienating its customers. In Germany, Benettons dealers even began boycotting its products after the customers complained, causing significant fall in sales and erosion of brand equity (Joachimsthaler and Aaker, 1997). The case of L&T discussed in this chapter indicates how the emerging market firms can use alternative reputation building vehicles, and compete at par with the multinational enterprises that rely on huge investments into state-of-art technology and ready-made local talent. Specifically, the firms need to identify core cultural identity, and transform each worker into an entrepreneurial leader. They must accept the workforce as the prime mover, and create an environment where each worker works on actualizing the unique potential he or she has. We would like to end with food for thought for the skeptics of the proposition presented in this chapter. It is well known that a persistent and consistent tortoise wins the race over an over-confident rabbit. However, even when the rabbit is not over-confident and is willing to put in all the might and 178 TRANSFORMATIVE ORGANIZATIONS resources available, one hundred tortoises can reach one hundred destinations faster and without burnout, as compared to the rabbit who tries to be first at each of those destinations. References Dye, R. (2000). The Buzz on Buzz. Harvard Business Review, Nov-Dec, 139 147. Gupta, V., I.C. Macmillan & G. Surie (2003). Entrepreneurial Leadership: Developing a Cross-cultural Construct. Journal of Business Venturing, in press. Gaffney, J. (2001). The Cool Kids Are Doing It. Should You?. Business 2.0, November, http://www.business2.com/articles/mag/0,1640,17380,00.html. Joachimsthaler, E. & D.A. Aaker (1997). Building Brands Without Mass Media'. Harvard Business Review, JanFeb, 3950. Kumar, S.R. (1998). Marketing NuggetsConceptual Dimensions in Marketing, New Delhi: Vikas Publications. (2001). Marketing Indian Brands: Marketing Concepts and Strategies, New Delhi: Vikas Publications. Levitt, T. (1980). Marketing Success through Differentiationof Anything. Harvard Business Review, JanFeb, 8391. Loudon, D.L. & A.J. Della-Bitta (1988). Consumer Behavior: Concepts and Applications, Third Edition, New York: McGraw-Hill. Park, C.W., B.J. Jaworski & D.J. MacInnis (1986). Strategic Brand Concept- Image Management. Journal of Marketing, 50 (October), 135145. Pascale, R.T. (1996). The Honda Effect. California Management Review, 38(4): 8091. Schmitt, B.H. (1999). Experiential Marketing: How to Get Customers to Sense, Feel, Think, Act and Relate to Your Company and Brand, New York: The Free Press. PERFORMANCE DRIVERS OF CORPORATE RESTRUCTURING IN KOREA 179 Geographical Strategies in the Confucian Context Performance Drivers of Corporate Restructuring in Korea Seungwha (Andy) Chung * l Gyeong Mook Kim Corporate managements engage in restructuring to turn around a problematic business situation and/or to build a long-term growth engine. Restructuring performance is, however, not always positive, and it takes time to realize the benefits from it. Generally speaking, restructuring is a two-stage deal. The man- agement first exercises restructuring initiatives to ensure short-term vitality of the company, and next creates new businesses to sustain its competitiveness. Top managers who do not understand this restructuring process have a tough time in achieving a successful turnaround. Our study takes this view as a point of reference to understand the restructuring initiatives and performance of Korean firms in the last few years. Robbins and Pearce (1992) distinguish these sequential turnaround actions as retrenchment and recovery strategies, respectively. This research study aims to consider the causal chains and performance consequences of these well known, but hard-to-conduct restructuring practices. We borrow the process idea from the balanced scorecard perspective to test restructuring effectiveness. Although the balanced scorecard is originally designed to assess multi-level organizational performance status for achieving strategic goals (Kaplan and Norton, 2001), we suggest that the same perspective can also be applied to assess restructuring activities, which are essentially strategic actions for better corporate performance. Our research setting will be the Korean machinery industry right after the national financial crisis toward the end of 1997. From that time on till now, Korean companies have tried to focus on their core businesses, adopting American patterns of corporate restructuring and downsizing. This study considers all the restructuring initiatives covering financial, portfolio, and organizational restructuring during the three years from 1998 to 2000, taken by the 103 machinery companies publicly traded on the Korean Stock Exchange. We analyze the short- and long-term performance effects of restructuring initiatives. 10 * This work was supported by a Korea Research Foundation Grant (KRF-2001-042-C00098). The authors thank Boyoung Cheon for her committed research assistance. 180 TRANSFORMATIVE ORGANIZATIONS Literature Review Restructuring has become a popular management tool to deal with rapid business change in todays competitive environment. In accordance with this trend, popular business literature regularly reports diverse consequences of restructuring practices. Most of the reports, however, have some limitations. First of all, as Bowman and Singh (1993) and Bowman et al., (1999) point out, analyses on the consequences of restructuring are typically focused on financial performance. Though concise, financial measures are inadequate to guide and evaluate the journey that companies under restructuring take to create future value. The future financial value will come from the investment in customers, suppliers, employees, processes, technology, and innovation. Realistically, difficulties in placing a reliable financial value on such assets as the new product pipe line, process capabilities, employee skills, motivation, flexibility, customer loyalty, data bases, and systems will probably preclude them from ever being recognized in organizational balance sheets. Yet, these are the very assets and capabilities that are critical for success in todays competitive environment. Moreover, most studies focus on only one or two restructuring activities. Analyzed activities include: (a) portfolio restructuring (Bowman and Singh, 1990; Comment and Jarrell, 1992; Jensen, 1991; Shleifer and Vishny, 1992), (b) ownership restructuring (McConnell and Servaes, 1990; Morck et al., 1988), (c) asset divestiture and cost reduction (Barker and Mone, 1994), (d) organization restructuring (Bowman and Singh, 1993; Zajac and Kraatz, 1993; Amburgey et al., 1990; Robins, 1993), (e) workforce reduction (Bruton et al., 1996; McKinley et al., 1999; Barker et al., 1998; Cascio et al., 1997; Mentzer, 1996; Wayhan and Werner, 2000), (f) governance structure restructuring (Bethel and Liebeskind, 1993; Brush, Bromiley, and Hendrickx, 2000; Gibbs, 1993), and (g) financial restructuring (Lane, Cannella, and Lutatkin, 1998; Oswald and Jahera, 1991). However, companies usually employ various restructuring tools concomitantly or sequentially. Thus, there exists a serious gap between business reality and empirical analysis. RESTRUCTURING PERFORMANCE Corporate restructuring is understood to enhance such organizational perfor- mance as profit, shareholder value, strategic alignment with the changing environment, and the long-term competitive capability. However, empirical research assessing whether organizations actually achieve these intended outcomes is relatively sparse. Furthermore, the results of the existing research outcomes indicate a lack of consensus on the issue. While many scholars assert that corporate restructuring enhances performances (Bowman et al., 1999; Jensen and Murphy, 1990; McConnell and Servaes, 1990; Morck et al., 1988; Robbins, 1993; Geringer, Tallman, and Olsen, 2000; Wayhan and Werner, 2000; Zajac and Kaatz, 1993), other researchers report there was no significant relationship between restruc- turing and financial performance (Barker and Mone, 1994; Barker et al., 1998; Bruton et al., 1996; Cascio et al., 1997; McKinley et al., 1999; Mentzer, 1996). PERFORMANCE DRIVERS OF CORPORATE RESTRUCTURING IN KOREA 181 On the more negative side, restructuring in general is considered to be disruptive and, thus, increases the rate of firm failure (Hannan and Freeman, 1984). Amburgey, Kelly, and Barnett (1990) support this negative argument, suggesting that change is hazardous because it destroys part of a firms existing proven practices. This destruction may be accompanied by the loss of corporate competencies due to the abandonment of familiar routines. Another proposition in this regard is that reorganization may disrupt relationships with external actors that organizations need to survive (Anderson, 1991). This disruption of key external relationships is detrimental to the firm because such relationships are difficult to build and need constant care to be maintained. A few attempts have been made to synthesize diverse aspects of restructur- ing initiatives and performance consequences. First of all, Schendel et al. (1976) and Hofer (1980) classify restructuring action either as operating or strategic. Schendel et al. (1976) introduce the notion of strategic operation contingency to distinguish restructuring resulting from poor strategy against the one resulting from poor operations. They found that while a substantial portion of declines was due to some efficiency problems, restructuring actions were more frequently associated with strategic moves. Hofer (1980), on the other hand, conceptual- izes the link between the severity of downturn and the characteristics of restruc- turing. Strategic moves are responsible for more dramatic restructuring. Applying the notion of operational restructuring, Ofek (1993) looks at the effects of financial distress with a sample of 358 firms. He classifies restructuring strategies into six categories: asset restructuring, employee layoffs, management replacement, dividend cuts, debt restructuring, and bankruptcy filings. The results show that higher pre-distress leverage increases the probability of operational actions, particularly asset restructuring, employee layoffs, and dividend cuts. Comparing financial and non-financial restructuring actions, Pelham (2000) investigated the differences in restructuring strategies between successful and unsuccessful companies. The results suggest that non-financial strategies (such as R&D, quality control, customer management, education of employees) are more performance-enhancing than financial strategies (such as costs and workforce reductions, or recapitalization). Also, Grinyer et al., (1990) show that successfully recovering companies tended to focus more heavily on making significant improvements in operational aspects of their businesses such as marketing and production whereas unsuccessful companies stressed acquisitions, debt reduction, and diversification. To sustain their improvements in performance, they gave a greater weightage to good management, organizational reshaping, quality management, and customer management. This study supports this sequential approach in restructuring. THE CAUSAL PERFORMANCE CHAIN IN RESTRUCTURING One-sided analyses, as discussed above, do not shed light on the leads and lags of management initiatives that realistically describe the trajectory of restructuring strategy and action. In fact, based on the balanced scorecard concept, Kaplan 182 TRANSFORMATIVE ORGANIZATIONS and Norton (1996a) assert that successful firms adopt more differentiated strategies as compared with unsuccessful firms, and employ sophisticated measurement devices appropriate for their greater degree of differentiation. As well publicized, the balanced scorecard perspective views organizational performance from four distinctive perspectives: financial, customer, internal business process, and learning and growth (Kaplan and Norton, 1992, 2000). If we extend the underlying principle of this balanced scorecard concept, we can analyze how companies restructure to create value for current and future cus- tomers, and how they enhance internal capabilities and investment in people, systems, and practices necessary to improve future performance while retaining short-term financial performance. Outcome measures without performance drivers do not communicate how the outcomes are to be achieved. They also do not provide sequential milestones on whether or not a restructuring strategy is being implemented successfully step by step. Working under the causal chain of the balanced scorecard, manage- ment may capture a series of restructuring initiatives as key performance drivers (i.e., leading indicators) that ultimately produce desired outcomes (i.e., lagging indicators) (Kaplan and Norton, 1996b). In accordance with this underlying performance principle, we can suggest that strategic initiatives and restructuring actions following the causal chains of the corporate performance cycle from learning and growth, to internal process, to customer, and finally to financial outcome, will lead to the increased corpo- rate value. As long as companies engage in restructuring activities constantly, those applying the balanced scorecard perspective to their restructuring strategy will be more successful, with the benefit of fine-tuned systematic performance measures. Given this premise, our primary research question is: How can we interpret restructuring outcomes in a causal performance sequence as proposed by the balanced scorecard perspective? We approach this question by considering: (a) the sequential relationships among restructuring initiatives as performance drivers, and (b) the linkage between restructuring initiatives and their effects on performance outcomes. This study will, thus, provide an initial step for the development of a general theory of corporate restructuring though in the context of a Korean industry. HYPOTHESES Robbins and Pearce (1992) distinguish restructuring strategy for retrenchment from that for recovery. In the initial stage (retrenchment), companies seek to stabilize declining performance for positive cash flows through asset divestment, headcount cuts, product elimination, and reduction in costs. The results of this retrenchment response are observable as changes in the income statement and balance sheet accounts. As they achieve financial stability, companies begin to emphasize substantial business activities that represent the implementation of their long-term strategy. This recovery response seeks to establish the long-term growth through market penetration, reconcentration and segmentation, new [...]... attended the 1991 Guangzhou Ceramics Exhibition where he met Zhaofeng Li, president and chairman of the Board of Directors of the Hong Kong Zhaofeng Ceramics Group Corporation Li had dreamed of becoming king of the Chinese ceramics business and had been looking for a competent domestic partner Zhangs capability, confidence, and sincerity were 202 TRANSFORMATIVE ORGANIZATIONS well suited to Lis ambition... longitudinal perspective Journal of Management, 26(2): 341363 Zajac, E.J., & M.S Kraatx (1993) A diametric forces model of strategic change: Assessing the antecedents and consequences of restructuring in the higher education industry Strategic Management Journal, 14 (Summer Special): 83102 GLOBALIZATION OF MARKET-DRIVEN STATE ENTERPRISE 11 197 Globalization of Market-driven State Enterprise CHN-CHN... cycles Strategic Management Journal, 12(4): 251270 McConnell, J & H Servaes (1990) Additional evidence on equity ownership and corporate value Journal of Financial Economics, 27: 595612 McKinley, W., A.G Schick, H.L Sun & A.P Tang (1999) The financial environment of layoffs: A descriptitive study Journal of Strategic Management, 2(1): 121145 Mentzer, M.S (1996) Corporate downsizing and profitability... included mergers and acquisitions, joint ventures and strategic alliances, new subsidiaries, entry into new businesses, capital investment, and capital asset acquisitions Divestiture included divestment activities to concentrate on core capabilities such as business line selloffs, spinoffs, splitoffs, the divestment of subsidiaries, and the divestment of assets and businesses Third, with regard to organizational... Canadian manufacturing firms Strategic Management Journal, 11: 411418 PERFORMANCE DRIVERS OF CORPORATE RESTRUCTURING IN KOREA 195 Ofek, E (1993) Capital structure and firm response to poor performance Journal of Financial Economics, 34: 330 Oswald, S.L & J.S Jahera (1991) Research notes and communications the influence of ownership on performance: An empirical study Strategic Management Journal,... as strategy: Restructuring production in the film industry Strategic Management Journal, 14 (Summer Special): 103 118 Schendel, D.E & G.R Patton (1976) Corporate turnaround strategies: A study of profit decline and recovery Journal of General Management, 3(3): 311 Shleifer, A & R Vishny (1992) The takeover wave of the 1980s Journal of Applied Corporate Finance, 5: 4956 Simerly, R.L., & M Li... lines of business based on their distinctive competencies References Amburgey, T.L., D Kelly & W.P Barnett (1990) Resetting the clock: The dynamics of organizational change and failure Academy of Management Best Paper Proceedings, 160164 Anderson, P (1991) The hazards of reorganization Working Paper, Cornell University Barker V.L., & M.A Mone (1994) Retrenchment: Cause of turnaround or consequence of. .. governments choice of tableware for use at the state banquet to celebrate the 50th birthday of the Peoples Republic of China, hosting 5000 people C&Cs product quality even meets the stringent requirements of Rosenthal in Germany 200 TRANSFORMATIVE ORGANIZATIONS C&C S S TRATEGIC P LAN Foreign competitors, who produced better quality china, were largely responsible for the rapid decline of Chinas ceramics... non-orthogonal problems Technometrics, 12: 5567 194 TRANSFORMATIVE ORGANIZATIONS Hofer, C.W (1980) Turnaround strategies Journal of Business Strategy, 1(1): 1931 Jensen, M (1991) Corporate control and the politics of finance Journal of Applied Corporate Finance, 4: 1333 Jensen, M & K Murphy (1990) Performance pay and top management incentives Journal of Political Economy, 98: 225264 Jöreskog, K.G... of two Cs facing each other symbolized the shape of a plate Zhang started public advertisements in 1995 and positioned C&C in the high-end segment of the domestic ceramic market The promotion reached its climax in 1999 when the Great Hall of the People ordered 250,000 pieces of ceramic products from C&C for the 50th Anniversary of the Peoples Republic of China As a result, C&C became Chinas First . 1.275+ (0. 741 ) 870.313* (397 .46 2) 1 .41 1+ (0.835) 47 9.103 (3 74. 742 ) 0.822 (0. 748 ) Efficiency change 12 .49 8+ (6 .48 5) 0. 541 (0. 745 ) 376.667 (298.068) 0.692 (0.626) 3 04. 515 (260.112) 0 .45 2 (0.519) Efficiency*downsizing. 0.922 (1. 148 ) 2610.297** (46 3.5 54) 0 .42 0 (0.9 74) 2083.718** (43 2.308) 0 .46 9 (0.863) Efficiency*divestiture 1.680+ (0.922) 0.158 (0.106) 1 34. 483* ( 54. 987) 0.059 (0.116) 1 84. 618** ( 54. 495) 0.109. 0.18 .257** .007 . 044 .357** .266** .030 .229* .2 14* .520** .6 04* * .48 4** .206* .010 .42 8** .6 64* * .833** 18. Debt ratio (%) 391.92 2 844 .33 .018 . 042 .062 .109 .1 14 .015 .036 .013 .059
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