Selected Economic Papers
The Cournot Centre series
Edited by Jean-Philippe Touffut
Chapter 1: The transformation of corporate organization in Europe: an overview
Wolfgang Streeck INTRODUCTION The rising significance of small and medium-sized enterprises notwithstanding, very large firms still account for most of the employment and wealth creation in Europe and will continue to do so for the foreseeable future.1 They also, to a large extent, determine the political institutions that regulate the relationship between economy and society, in particular the status of workers and the way in which the public interest is brought to bear on the economy. The overview presented here of the current transformation of corporate organization in Europe begins by asking whether there is in fact a European model of the large firm, despite the considerable differences which exist between European countries. It also asks whether, or to what extent, European integration is likely to bring about convergence towards a more uniform pattern. Next, it reviews those changes in the organization of large European firms and in corporate governance in Europe which took place during the 1990s in response to the evolution of two of the major ‘task environments’ of firms, namely product markets and financial markets. Thirdly, the chapter discusses the consequences of corporate transformation for the social embeddedness of large European firms, especially the challenges posed by current changes in corporate organization to European systems of industrial citizenship and to the capacity of European states and governments to hold large firms socially accountable. In conclusion, the chapter emphasizes the growing autonomy of large firms as strategic actors, and it comments on the problems of corporate adjustment under...
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