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Foreign Direct Investment in the UK 1985–1994: The Impact on Domestic Management Practice

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  • John Child
  • David Faulkner
  • Robert Pitkethly

Abstract

Foreign direct investment (FDI) into the UK has grown considerably in recent years. US, French, German and Japanese companies have generally accounted for the largest share of this FDI. In addition to greenfield and expansion investment, a major vehicle for inward FDI has been the acquisition of UKcompanies. This paper examines whether nationally distinct approaches to management were introduced, following acquisition, among a sample of 201 UK subsidiaries of French, German, Japanese,US and UK companies. It provides data on the extent of changes and the post‐acquisition influence of the new parent, comparing changes between the four foreign nationalities and a UK control group. The study indicates that the process of being acquired and controlled by a foreign parent company was often followed by significant changes in management practice. Some changes were common to all acquisitions, including those by UK companies. A shift towards performance‐related rewards and a stronger quality emphasis in operations are two examples. In addition, there was also evidence of effects which differed between nationalities. These conformed to accepted characterizations of national management practice in the case of Japanese and US acquirers, but less so in the case of French and German acquisitions. The findings suggest that present views of French and German management practice require further investigation.

Suggested Citation

  • John Child & David Faulkner & Robert Pitkethly, 2000. "Foreign Direct Investment in the UK 1985–1994: The Impact on Domestic Management Practice," Journal of Management Studies, Wiley Blackwell, vol. 37(1), pages 1-1, January.
    • Handle: RePEc:bla:jomstd:v:37:y:2000:i:1:p:no-no:2
    DOI: 10.1111/1467-6486.00175
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    Cited by:

    1. Tony Edwards & Paul Edwards & Anthony Ferner & Paul Marginson & Olga Tregaskis, 2010. "Multinational Companies and the Diffusion of Employment Practices from Outside the Country of Origin," Management International Review, Springer, vol. 50(5), pages 613-634, October.
    2. Colman, Helene Loe, 2020. "Facilitating integration and maintaining autonomy: The role of managerial action and interaction in post-acquisition cabability transfer," Journal of Business Research, Elsevier, vol. 109(C), pages 148-160.
    3. Bauer, Florian & Matzler, Kurt & Wolf, Stefan, 2016. "M&A and innovation: The role of integration and cultural differences—A central European targets perspective," International Business Review, Elsevier, vol. 25(1), pages 76-86.
    4. Panagiotopoulos, Miltiadis, 2005. "The Evolution of Trade Unions in Britain," MPRA Paper 4290, University Library of Munich, Germany, revised 2007.
    5. Beccari, Gabriele & Pisicoli, Beniamino & Vocalelli, Giorgio, 2023. "Barbarians at the gate? FDI and target firms’ management quality," MPRA Paper 117242, University Library of Munich, Germany.
    6. Anthony Ferner & Jacques Bélanger & Olga Tregaskis & Michael Morley & Javier Quintanilla, 2013. "U.S. Multinationals and the Control of Subsidiary Employment Policies," ILR Review, Cornell University, ILR School, vol. 66(3), pages 645-669, May.

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