The tension between innovation and financialisation is central to the business corporation. Innovation entails a 'retain-and-reinvest' allocation regime that can form a foundation for stable and equitable economic growth. Driven by shareholder-value ideology, financialisation entails a shift to 'downsize-and-distribute'. This Element investigates this tension in global pharmaceuticals, focusing on the two leading UK companies AstraZeneca and GlaxoSmithKline. In the 2000s both adopted US-style governance, including stock buybacks and stock-based executive pay. Over the past decade, however, first AstraZeneca and then GlaxoSmithKline transitioned to innovation. Critical was the cessation of buybacks to refocus capabilities on investing in an innovative drugs pipeline. Enabling this shift were UK corporate-governance institutions that mitigated US-style shareholder-value maximisation. Reinventing capitalism for the sake of stable and equitable economic growth means eliminating value destruction caused by financialisation and supporting value creation through collective and cumulative innovation. This title is also available as Open Access on Cambridge Core.

Business corporations interact with household units and government agencies to make investments in productive capabilities required to generate innovative goods and services. When they work harmoniously, these three types of organizations constitute 'the investment triad'. The Biden administration's Build Back Better agenda to restore sustainable prosperity in the United States has focused on investment in productive capabilities by government agencies and household units. Largely absent from the Biden agenda have been policy initiatives to ensure that, given government and household investment in productive capabilities, the governance of major U.S. business corporations supports investment in innovation. This Element explains how corporate financialization, manifested by predatory value extraction in the name of 'maximizing shareholder value', undermines investment in innovation in the United States. It concludes by outlining a policy framework, beginning with a ban on stock buybacks, that confronts predatory value extraction and puts in place social institutions that support sustainable prosperity.

Predatory Value Extraction explains how an ideology of corporate resource allocation known as 'maximizing shareholder value' (MSV) that emerged in the 1980s came to dominate strategic thinking in business schools and corporate boardrooms in the United States. Undermining the social foundations of sustainable prosperity, it resulted in employment instability, income inequity, and slow productivity growth. In explaining what happened to sustainable prosperity, William Lazonick and Jang-Sup Shin focus on the growing imbalance between value creation and value extraction in the U.S. economy, and the corporate-governance institutions that determine this balance in the nation's major business corporations. The imbalance has become so extreme that predatory value extraction is now a central economic activity, to the point at which the U.S. economy as a whole can be aptly described as a value-extracting economy. Balancing the contributions of economic actors to value creation with their power to extract value provides the foundation for stable and equitable economic growth. When certain economic actors are able to assert their power to extract far more value than they contribute to the value-creation process, an imbalance occurs which, when extreme, leads to dire economic, political, and social consequences. This book not only explores these consequences, but also sets out an agenda for restoring sustainable prosperity.

Considering the recent impact of the capital market on corporate strategy, this text analyzes, through argument and supportive case studies, how pressures from the capital bull market of the 1990s and bear market of the early 2000s, have reshaped management action and calculation in large, publicly quoted US and UK corporations. Beginning with the dissatisfaction with classical strategy and its limited engagement with the processes of financialization, the book moves on to cover three detailed company case studies (General Electric, Ford and GlaxoSmithKline) which use long run financial data and analysis of company and industry narratives to illustrate and explore key themes. The book emphasizes the importance of company and industry narrative, while also analyzing long term financial results, and helps to explain the limits of management action and the burden of expectations placed on corporate governance. Presenting financial and market information on trajectory in an accessible way, this book provides a distinctive, critical social science account of management in large UK and US corporations, and it is a valuable resource for students, scholars and researchers of business, management, political economy and non-mainstream economics. short listed for the 2007 IPEG Book Prize

This book investigates the performance of firms and households in Tanzania and the strategies they adopt to navigate shocks, achieve sustainability, and build resilience to sustain their growth and development. The contributions show that Tanzania, like many countries, faces a challenging future but is better positioned to do so than it has been.

Capitalism is a powerful engine that requires finance. Private equity is part of the neoliberal transformation of capitalism that has failed the average citizen and unleashed a tsunami of leveraged acquisitions that have destroyed entire sectors of our economy. Private equity has become a powerful force that has moved from restructuring industrial firms to buying up just about any economic activity in local communities that has assets that can be monetized, without any consideration of the impact on the quality of life and well-being of the community. Th a process has been aided and abetted by government policy. The authors of this Element explain the workings of the private equity model and the reasons it has been so profitable. They document the effects of PE on firms and communities by examining a range of activities that once had a local focus. They conclude by offering policy recommendations.

This Element reviews the varieties of capitalism approach (VoC) first developed by Hall and Soskice and subsequent extensions to emerging markets. The author suggests that by reinvigorating existing ideal types and creating new ones through an analysis of its five variables in a variety of countries VoC can be used to evaluate the viability of economic reforms across a wide range of countries. He argues that governments should base changes on lessons from other countries belonging to their ideal type. This Element illustrates the utility of VoC in understanding how reforms will differ across countries by examining how the future of work is likely to differ across nations depending on the degree to which the five institutions explored in this approach promote the standardization of tasks. It analyzes how these institutions shape degrees of standardization in the United States, Germany, and Brazil, offering suggestions for reforms in each of them.

The corporation was a timely emergent phenomenon of the capitalist system. Under entrepreneurial ownership with customer value creation goals, corporations introduced new products and services, new capital structures and new management processes capable of improving customer experiences in every facet of their lives. After entrepreneurship, the organizational model transitioned to managerial capitalism, and from there into command-and-control and central planning. Then came further transition into the era of financialization, where shareholder value replaced customer value as the purpose of the corporation. Managers diverted resources to their own enrichment as well as that of shareholders, at the expense of investment in future innovation. Capitalism's reputation has become tarnished and its purpose distorted. This Element ends with the promise of another emergent era, via the corporations of the digital age.

We have entered an era of perverse economic growth, at the expense of social and natural capital. As the world runs further behind on the Sustainable Development Goals, managing and mitigating the looming environmental and social crises in an increasingly volatile, uncertain, complex and ambiguous world will be one of the biggest challenges, but also biggest commercial opportunities of our time. Building on earlier research on systemic change, using the WHAT-HOW-WHY framework, this Element presents actionable insights for the radical systemic reinvention of our 'critical systems' that satisfy human and societal needs, such as nutrition, mobility, infrastructure or health. The authors highlight ten emerging paradigms for future-fit systemic change, discuss how stakeholder mindsets can be developed, and present new skills for leaders and a pathway for companies to become drivers of collaborative transformation. This title is also available as Open Access on Cambridge Core.

Token forces – tiny national troop contributions in much larger coalitions – have become ubiquitous in UN peacekeeping. This Element examines how and why this contribution type has become the most common form of participation in UN peace operations despite its limited relevance for missions' operational success. It conceptualizes token forces as a path-dependent unintended consequence of the norm of multilateralism in international uses of military force. The norm extends states' participation options by giving coalition builders an incentive to accept token forces; UN-specific types of token forces emerged as states learned about this option and secretariat officials adapted to state demand for it. The Element documents the growing incidence of token forces in UN peacekeeping, identifies the factors disposing states to contribute token forces, and discusses how UN officials channel token participation. The Element contributes to the literatures on UN peacekeeping, military coalitions, and the impacts of norms in international organizations.