World Famous in New Zealand by unknow

Author:unknow
Language: eng
Format: epub
Tags: Business and Economics
Publisher: Auckland University Press
Published: 2001-01-01T00:00:00+00:00

Public stock corporation (PSC)

Professional management

Historically, the public stock corporation was invented to overcome the limitations of OME governance. By separating ownership from the management of the firm, the PSC greatly expanded the contributions employees could make to the direction of the enterprise. Typically, multinational PSCs add professional systems of management planning and control to the OME companies they acquire. As well as providing a foundation for organisational learning, such systems make important contributions to the overall coherence of the enterprise. By moving beyond the limits of the individual owner-manager, the PSC is designed to enhance the scope and balance of the firm’s configuration of capabilities. A steady flow of managers through the organisation, at all levels, gives the PSC constant access to new perspectives, and new sources of initiative and energy.

Almost the entire weight of management studies over the last two decades has been devoted to diagnosing the limitations of the PSC. These include its excessive delegations and hierarchy (see Jacques, 1990), its predilection for spending shareholders’ money on diversification that produce jobs for managers but poor returns for owners, and its tendency to trap thinking in ‘dominant logics’ (see Bettis and Prahalad, 1995) and’architectures of simplicity’ (see Miller, 1993) that inhibit change. But the fact remains that the bulk of global production continues to pass through PSC hands. Any balanced assessment would still have to conclude that the PSC has been a great institutional innovation.

The experience of our companies suggests that many of the distinctive advantages of the PSC have indeed been realised. The PSC, in its MNC variant, or in the form of professional managers and consultants brought into the firm, has been the origin of professional management systems introduced to OMEs.10 Nuplex Industries, which has the longest share listing history in our study (indeed one of the longest surviving listings on the New Zealand Stock Exchange), has developed a remarkable range of 2000 products and an extensive range of markets in which it is active. This breadth of scope is now the basis for the company’s competitive appeal overseas. Integral to this evolution has been the development of many general management roles within the firm, roles that span marketing and HR as well as technology. Fred Holland comments on the distinctive nature of management in New Zealand:

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