Introduction

O. E. Williamson has convincingly argued that the organisation of firms should be taken into consideration to explain Japanese and American economic performance (Williamson, 1985). Recent advances in the theory of the firm have also emphasised the role of a number of factors in competitiveness. The presence of these factors is supposed to explain why plant and equipment earn more profits if they are owned by one corporation rather than by another. These factors include particular technological skills, complementary assets and efficient routines (Dosi et al., 1991). It can be argued that the corporate control and its efficiency are central features of organisation and are skills which analysis of competitiveness must take into account.

The protection that surrounded domestic capital markets and the control of foreign investment flows have given specific characteristics to corporate control in the individual European countries. West Germany and France, to quote but two countries, present marked contrasts. The superior postwar performance of German firms has often been attributed to the close relation between banks and industry (Cable, 1985). In France, the existence of ‘groups’ of firms, connecting non-financial and financial companies and benefiting from administrative influences, has given rise to industrial achievement, but has been accused of having weakened smaller businesses (LEREP, 1987).

The aim of this chapter is to analyse the role of corporate control as an intermediation between ownership and management.