Risking the ire of investors in pursuit of long-term value: an interview with Cynthia Carroll, the CEO of Anglo American plc

Purpose – The purpose of this paper is to demonstrate how key strategic decisions are made in practice at successful FTSE 100 companies. Design/methodology/approach – The paper is based on a semi-structured interview with Ms Cynthia Carroll, Chief Executive of Anglo American plc. Findings – The interview outlines a number of important factors on: the evolution of strategy within Anglo American, strategy execution, leadership at board and executive levels, and capturing synergies within the company. Originality/value – The paper bridges the gap between theory and practice. It provides a practical view and demonstrates how corporate leaders think about key strategic issues

A case study and interview with Jill McDonald CEO and President of McDonald's Northern Europe Division

Purpose – The purpose of this paper is to demonstrate how strategy is developed and implemented within a subsidiary of a global organization, the relationship between subsidiary and headquarters and the need for continuous change and adaption to remain relevant. Furthermore, this case study describes a successful process of invention and adoption. Design/methodology/approach – The paper draws on documentary evidence and a semistructured interview with Jill McDonald CEO and President of McDonald’s Northern Europe Division with responsibility for the UK, Sweden, Finland, Denmark, Norway and the Republic of Ireland. Management research rarely captures the views of the top executive, yet the top executives have a broad picture and are key strategic decision makers. Findings – The case study and interview offers a unique insight into factors contributing to McDonald’s unprecedented success (it has paid an increased dividend for the past 37 years). It also sheds light on its successful internationalization strategy. Originality/value – The case study draws on published material and augments this with an in-depth interview with the Chief Executive. Very few case studies offer insight into the thinking of a Chief Executive managing a subsidiary of a global organization. Its value lies in the lessons that managers and students of management can draw on the approach adopted by a highly successful global organization.

Creating a world class business through a merger of two equals: an interview with Paul Walsh, Chief Executive Officer of Diageo Plc

Purpose – The purpose of this paper is to explore, from a practical point-of-view, a number of key strategic issues that critically influence organisations' competitiveness. Design/methodology/approach – The paper is based on a semi-structured interview with Mr Paul Walsh, CEO of Diageo. Diageo is a highly successful company and Mr Walsh has played a central role in making Diageo the number one branded drink company in the world. Findings – The paper discusses the key attributes of successful merger, lessons from a complex cross boarder acquisition, rationale for strategic alliance with competitors, distinctive resources, and the role of corporate social responsibility. Research limitations/implications – It is not too often that management scholars have the opportunity to discuss with the CEOs of large multinationals the rational of key strategic decisions. In this paper these issues are explored from the perspective of a CEO of a large and successful company. The lessons, while not generalisable, offer unique insights to students of management and management researchers. Originality/value – The paper offers a bridge between theory and practice. It demonstrates that from Diageo's perspective the distinctive capabilities are intangible. It also offers insight into how to successfully execute strategic decision. In terms of originality it offers a view from the top, which is often missing from strategy research.

Generic strategies and performance: evidence from manufacturing firms

Purpose – The purpose of this study is to examine the relationship between business-level strategy and organisational performance and to test the applicability of Porter's generic strategies in explaining differences in the performance of organisations. Design/methodology/approach – The study was focussed on manufacturing firms in the UK belonging to the electrical and mechanical engineering sectors. Data were collected through a postal survey using the survey instrument from 124 organisations and the respondents were all at CEO level. Both objective and subjective measures were used to assess performance. Non-response bias was assessed statistically and it was not found to be a major problem affecting this study. Appropriate measures were taken to ensure that common method variance (CMV) does not affect the results of this study. Statistical tests indicated that CMV problem does not affect the results of this study. Findings – The results of this study indicate that firms adopting one of the strategies, namely cost-leadership or differentiation, perform better than “stuck-in-the-middle” firms which do not have a dominant strategic orientation. The integrated strategy group has lower performance compared with cost-leaders and differentiators in terms of financial performance measures. This provides support for Porter's view that combination strategies are unlikely to be effective in organisations. However, the cost-leadership and differentiation strategies were not strongly correlated with the financial performance measures indicating the limitations of Porter's generic strategies in explaining performance heterogeneity in organisations. Originality/value – This study makes an important contribution to the literature by identifying some of the gaps in the literature through a systematic literature review and addressing those gaps.

Successful strategy making in Bupa not-for-profit provident: a case study and interview with Mr Ray King, chief executive of Bupa

Purpose – The focus of extant strategy literature is on for-profit organisations and within these group public organisations. There are other forms of organisations and following the deep recession of 2008 there is greater interest in other forms of organisation. In this case study and interview the aim is to examine strategy, strategic decisions and strategic management of a not-for-profit provident. Design/methodology/approach – The paper draws on documentary evidence and a semi-structured interview with Ray King, chief executive of Bupa. The perspective of CEO is key in strategy and such perspectives are relatively rarer. Findings – Bupa invests its surplus to provide better healthcare. Free from the pressures of quarterly reporting and shareholders it can pursue long-term value creation for members rather than short-term surpluses. Research limitations/implications – The case study and interview offers a unique insight into strategy-making within a successful mutual provident that has grown organically and externally becoming an international leader in health insurance. Originality/value – This case study sheds light on strategy-making within a not-for-profit provident that has diversified and grown significantly over the past six decades. Furthermore, very few case studies offer insight into the thinking of a chief executive who has successfully managed a business in a turbulent environment.

The Corporate Gini Index (CGI) determinants and advantages: lessons from a multinational retail company case study

This article identifies and compares the determinants of CEO compensation to median employee earnings with those of the Corporate Gini Index (CGI). Using a multinational retail company, the article posits that the CGI is an advantageous corporate alternative pay inequality measure that concerns CEO pay multiples to median employee earnings, which regulators should consider using and disclosing in proxy statements. Although CGI and the official measure of multiples of CEO pay to median employee earnings share some of the challenges, the advantages of CGI as an alternative measure are greater. Our findings suggest that the CGI is a much better measure of corporate income inequality bringing clear benefits at both micro and macro levels of intervention.

Risk taking of executives under different incentive contracts: experimental evidence

Classic financial agency theory recommends compensation through stock options rather than shares to counteract excessive risk aversion in agents. In a setting where any kind of risk taking is suboptimal for shareholders, we show that excessive risk taking may occur for one of two reasons: risk preferences or incentives. Even when compensated through restricted company stock, experimental CEOs take large amounts of excessive risk. This contradicts classical financial theory, but can be explained through risk preferences that are not uniform over the probability and outcome spaces, and in particular, risk seeking for small probability gains and large probability losses. Compensation through options further increases risk taking as expected. We show that this effect is driven mainly by the personal asset position of the experimental CEO, thus having deleterious effects on company performance.