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Corporate America (corporate + america)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	60%

Selected Abstracts

Disciplining Investment Bankers, Disciplining the Economy: Wall Street's Institutional Culture of Crisis and the Downsizing of "Corporate America"

AMERICAN ANTHROPOLOGIST, Issue 2 2009
Karen Ho
ABSTRACT Countering the "mystique" of finance as abstract and disembedding, in this article I approach the financial market from the site of investment banking corporate culture to concretize large-scale processes and access its effects in the world. By investigating Wall Street investment banks' role in two pivotal socioeconomic phenomena,rampant downsizings throughout "corporate America" and the financial bubble and bust of 2001,I explore whether financial crises and corporate downsizing can be better understood via Wall Street's quotidian practices. I draw theoretical inspiration from the figure of the downsized investment banker, who embodies and connects Wall Street's rationales for downsizing as well as "the effects." Although shareholder value and externalized market justifications are Wall Street's models for understanding downsizing, I move beyond these dominant assumptions, demonstrating that bankers' own work experiences, market temporalities, and organizational culture serve as an incisive model to explain Wall Street's role in downsizing and financial crisis. [Keywords: Wall Street, corporate downsizing, financial markets, shareholder value, organizational culture] [source]

TRANSFERABLE STOCK OPTIONS (TSOS) AND THE COMING REVOLUTION IN EQUITY-BASED PAY

JOURNAL OF APPLIED CORPORATE FINANCE, Issue 1 2004
Brian J. Hall
The dominant form of equity pay in the U.S. will change dramatically when accounting rules are changed (most likely in 2005) to require companies to charge the cost of their stock option plans on their income statements. Many companies are already switching from stock options to other forms of equity pay, especially restricted stock. The most notable switcher was Microsoft, the world's largest user of stock option pay. In July 2003, partnering with J.P. Morgan, Microsoft created a onetime transferable stock option (TSO) program that allowed holders of underwater Microsoft options to sell their options to J.P. Morgan in return for restricted shares. But the most important consequence of this transaction may not be a widespread shift by corporate America to restricted shares, but rather the creation of a more costeffective kind of stock option. By clearing the potentially messy hurdles involving taxes, accounting, SEC rules, and "transaction mechanics," Microsoft has opened the door for TSOs to be considered as an ongoing equitypay instrument, perhaps replacing standard stock options (which are not transferable). TSOs share the key advantages of restricted stock in terms of providing robust retention and ownership incentives and higher valuecost efficiency, while maintaining the key "leverage" advantage of options. In so doing, they create significant upside (and downside) while largely avoiding the "pay for pulse" problem of restricted stock. They also introduce the discipline of competitive pricing by third-party bidders. The bid prices of investment banks create nearly all of the information required for accurate estimates of option cost, which should foster greater board accountability and improved corporate governance. [source]

TRANSFORMING ENRON: THE VALUE OF ACTIVE MANAGEMENT

JOURNAL OF APPLIED CORPORATE FINANCE, Issue 4 2001
Vince Kaminski
Soon after Enron was formed as a regulated gas pipeline company in 1985, economic events forced a dramatic reorganization of the company. The result was the creation of an unregulated energy trading operation whose mission was to capitalize on opportunities arising from the deregulation of the natural gas market The initial form of the new business was that of a "gas bank" in which Enron became an intermediary between buyers and sellers of gas, locking in the spread as profit. Since there was no source of liquidity to the market, Enron had to develop its own risk management system. Furthermore, the need to respond quickly to rapidly changing market conditions required that Enron flatten its organizational structure and hire new people whose skills were better suited to the new decentralized organization. The focus of the new Enron accordingly became human and intellectual capital, not physical assets. Employees were encouraged to move about the firm to staff new business ventures. And in what may well be a unique feature in corporate America, Enron's top management today uses its human capital flows to guide its allocations of financial capital. Other aspects of the Enron model include attempts to capitalize on the option (as opposed to current DCF) value of assets, recognition of the value of networks in adding value to trading platforms, and the use of mark-to-market accounting for business transactions as a means of ensuring transparency and promoting timely decision-making. [source]

Budgets: All bad things must come to an end

JOURNAL OF CORPORATE ACCOUNTING & FINANCE, Issue 1 2008
Dominic Paniccia
Jack Welch, the legendary former General Electric CEO, once said, "The budget is the bane of corporate America." Many people dread preparing annual budgets. Why is the budgeting process broken,and what can we do about it? © 2008 Wiley Periodicals, Inc. [source]