The corporation, shareholder value added, and the power of financial management narratives

    Research output: Chapter in Book / Conference PaperChapter

    Abstract

    ![CDATA[BHP Billiton is the world's largest resources company, although it is a relatively new global corporation having been assembled from the merger of BHP Ltd, a large Australian mining and steel manufacturing company, and Billiton PIc, a UK-listed company with extensive mining histories in southern Africa. Previously, both BHP and Billiton underwent major transformations in structure, assets, and operations during the 1990s. While each of the companies built wealth for its shareholders over many decades, their creation of shareholder wealth was always compromised by other claims on the surplus values they generated including from workers, governments, and local communities; and there have been a variety of means for reconciling these claims. In 2002, BHP Billiton introduced a new yardstick to guide its accumulation ambitions and its distributional flows. The Strategic Framework for the newly merged company announced that BHP Billiton's 'ultimate goal must be to be a core holding for global equity investors' (BHP Billiton Group 2002: 3) thereby positioning the global funds managers as BHP's single most important stakeholder group, a decidedly different relationship to those that historically underpinned both companies. The history of changes leading to the creation of BHP Billiton provides a valuable case-study opportunity to examine the nature of the modern firm-in particular the way that financial management narratives of the firm, including the calculus of shareholder value added (SVA), are driving contemporary corporate structures, organizational performance, regulatory and performance standards, and the nature and use of management devices. The first part of this chapter discusses the reasons why defining the firm and its nature is a difficult task. The second part recognizes that the same definitional problem confronting the academic· commentator confronts the manager of the firm, who is forever concerned with the production, organizational, financial, and legal domains of what it is to be managed. The third part examines the financial domains as one example of the way that firms are comprised and the issues managers face. The operation of the financial domain is demonstrated by a case study of changing financial management at BHP Billiton and the chapter concludes with implications for alternate accumulation and distributional pathways.]]
    Original languageEnglish
    Title of host publicationUnderstanding the firm : spatial and organizational dimensions,
    EditorsMichael Taylor, Päivi Oinas
    Place of PublicationOxford
    PublisherOxford University Press
    Pages117 - 145
    Number of pages29
    ISBN (Print)0199260796
    Publication statusPublished - 2006

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