Jones (1997)

Management > Comparative Management > Lectures > Independent Research > Jones > Culture > Improvements? > Post 1945 > Why it still wasn't working out

Why it still wasn't working out

The "outsider" system of corporate control, such as the M-form, was where ownership was dispersed among a large number of individual and institutional investors. The "insider" system, such as those of Japan and much of Europe, was where ownership was concentrated in the hands of a small group, such as families or banks.

The latter encouraged long-term relationships with suppliers and customers, which gave them a competitive advantage in the manufacturing industries.

Not only did Britain fail because of this, but also because UK firms "grafted" the M-form onto their companies, rather than adapting them. They didn't have the right culture and did not make a clear distinction between strategic and operating responsibilities.

In addition, the lack of trained managers meant that firms were inflexible at adapting to the rapidly changing global economy and technology developments.

However, the deep recession into which the Thatcher government threw British businesses meant that firms suddenly realised that they had to be more innovative if they were to stay afloat. Today, many British firms have moved their manufacturing facilities abroad, perhaps due to their uncompetitive domestic environment.