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Corporate Governance, Strategy and Survival in a Declining Industry: A Study of UK Cotton Textile Companies


  • Igor Filatotchev
  • Steve Toms


Building on the strategic flexibility perspective, this paper examines the influences of organizational diversity, ownership structure and board characteristics on strategic responses to industrial decline in firms from the UK textile industry. Using samples of exiting and surviving companies it shows that, in line with the predictions of the strategic flexibility framework, the surviving companies tended to have a higher level of organizational diversity. They also tended to have larger institutional ownership and more diverse boards. These factors are associated with higher investment, financial performance, and growth. The results are consistent with the resource and service roles of the corporate governance factors. Copyright Blackwell Publishing Ltd 2003.

Suggested Citation

  • Igor Filatotchev & Steve Toms, 2003. "Corporate Governance, Strategy and Survival in a Declining Industry: A Study of UK Cotton Textile Companies," Journal of Management Studies, Wiley Blackwell, vol. 40(4), pages 895-920, June.
  • Handle: RePEc:bla:jomstd:v:40:y:2003:i:4:p:895-920

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    References listed on IDEAS

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    2. Simeon Djankov & Peter Murrell, 2002. "Enterprise Restructuring in Transition: A Quantitative Survey," Journal of Economic Literature, American Economic Association, vol. 40(3), pages 739-792, September.
    3. Klaus E Meyer & Saul Estrin, 2001. "Brownfield Entry in Emerging Markets," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(3), pages 575-584, September.
    4. Chong Ju Choi & Soo Hee Lee & Jai Boem Kim, 1999. "A Note on Countertrade: Contractual Uncertainty and Transaction Governance in Emerging Economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(1), pages 189-201, March.
    5. Klaus E Meyer, 2001. "Institutions, Transaction Costs, and Entry Mode Choice in Eastern Europe," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(2), pages 357-367, June.
    6. Bruce Kogut, 2002. "Capital market development and mass privatization are logical contradictions: lessons from Russia and the Czech Republic," Industrial and Corporate Change, Oxford University Press, vol. 11(1), pages 1-37, February.
    7. Henisz, Witold J, 2000. "The Institutional Environment for Multinational Investment," Journal of Law, Economics, and Organization, Oxford University Press, vol. 16(2), pages 334-364, October.
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    Cited by:

    1. Sunny Sun & Jigao Zhu & Kangtao Ye, 2015. "Board Openness During an Economic Crisis," Journal of Business Ethics, Springer, vol. 129(2), pages 363-377, June.
    2. repec:spr:busres:v:10:y:2017:i:1:d:10.1007_s40685-016-0041-8 is not listed on IDEAS
    3. Toms, Steven, 2017. "Network preferences and the growth of the British cotton textile industry, c.1780-1914," MPRA Paper 80058, University Library of Munich, Germany.
    4. Pugliese, A. & Bezemer, P.J. & Zattoni, A. & Huse, M. & van den Bosch, F.A.J. & Volberda, H.W., 2009. "Boards of Directors’ Contribution to Strategy: A Literature Review and Research Agenda," ERIM Report Series Research in Management ERS-2009-013-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    5. Daniel Johanson, 2008. "Corporate governance and board accounts: exploring a neglected interface between boards of directors and management," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 12(4), pages 343-380, November.
    6. Toms, Steven, 2005. "Financial control, managerial control and accountability: evidence from the British Cotton Industry, 1700-2000," Accounting, Organizations and Society, Elsevier, vol. 30(7-8), pages 627-653.
    7. Iwasaki, Ichiro, 2013. "Global Financial Crisis, Corporate Governance, and Firm Survival: The Russian Experience," RRC Working Paper Series 37, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
    8. Hongjin Zhu & Pengji Wang & Chris Bart, 2016. "Board Processes, Board Strategic Involvement, and Organizational Performance in For-profit and Non-profit Organizations," Journal of Business Ethics, Springer, vol. 136(2), pages 311-328, June.
    9. repec:kap:jmgtgv:v:21:y:2017:i:4:d:10.1007_s10997-016-9373-1 is not listed on IDEAS
    10. Iwasaki, Ichiro, 2014. "Global financial crisis, corporate governance, and firm survival:," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 178-211.
    11. Szymon Kaczmarek & Satomi Kimino & Annie Pye, 2014. "Interlocking directorships and firm performance in highly regulated sectors: the moderating impact of board diversity," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(2), pages 347-372, May.

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