Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- I Bases of strategic management
- II Realizing strategy
- III Current themes and applications
- 9 State ownership, privatization, and performance
- 10 Does corporate governance make a difference to organizational performance?
- 11 Types of inter-organizational networks and the strategic roles of directors
- 12 Organizing for the future
- Index of names
- Index of subjects
- References
9 - State ownership, privatization, and performance
Published online by Cambridge University Press: 11 May 2010
Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- I Bases of strategic management
- II Realizing strategy
- III Current themes and applications
- 9 State ownership, privatization, and performance
- 10 Does corporate governance make a difference to organizational performance?
- 11 Types of inter-organizational networks and the strategic roles of directors
- 12 Organizing for the future
- Index of names
- Index of subjects
- References
Summary
While the traditional belief, supported by empirical work, has been that private ownership is generally associated with superior performance, the experience of Singapore is an example to the contrary. This chapter outlines global privatization trends and the impact of privatization programs. Using a variant of the organizational action (OA) view as a theoretical framework, Singapore Telecom is analyzed as a case where state ownership combined with several contextual and firm-related factors, especially firm strategy, has led to sustained world-class performance relative to its peers. This analysis challenges the widely held position that public ownership is associated with inferior performance and points to the importance of strategy as a key factor in aiding superior performance even under public ownership. Some theoretical and practical implications of the analysis are then outlined.
Global trends and the impact of privatization
The push to expand state ownership in the 1960s and 1970s met with a radical reversal in the 1980s, when governments progressively reduced their involvement in service provision by increasing private sector involvement, especially in the areas of power generation, telecommunications, water provision, and transport services, with significantly higher private sector involvement in the first two (Price Waterhouse 1996). Privatization in broad terms involves the transfer of ownership and/or control of state-owned organizations to private investors.
- Type
- Chapter
- Information
- Strategy and OrganizationRealizing Strategic Management, pp. 149 - 167Publisher: Cambridge University PressPrint publication year: 2003
References
Andrews, K. R., 1971. The Concept of Corporate Strategy, Homewood, IL: Irwin
Ansoff, H. I., 1965. Corporate Strategy, New York: McGraw-Hill
, 1986. Price and productivity change following deregulation: the US experience, The Economic Journal, 96: 1–17CrossRefGoogle Scholar
Bank of America, 1996. Guide to Telecommunications in Asia, Hong Kong: Euromoney Publications: 1–6
and , 1989. Privatization in the United Kingdom: lessons from experience, World Development, 17(5): 643–657CrossRefGoogle Scholar
, 1999. Government ownership and financial performance in a competitive environment: evidence from the corporatization of the New Zealand government computing services, Asia Pacific Journal of Management, 16: 157–172CrossRefGoogle Scholar
Business Times, 1999. Group wants bigger role in e-commerce, June 5
, 1996. To privatize or not to privatize?: That is the question; what is the answer?, Review of Radical Political Economics, 28(1): 96–111CrossRefGoogle Scholar
Center for Business Research and Development, 1999. Financial Highlights of Companies on the Stock Exchange of Singapore 1994–1998, Singapore: National University of Singapore
Chandler, A. D., 1962. Strategy and Structure: Chapters in the History of Industrial Enterprise, Cambridge, MA: MIT Press
, 1972. Organizational structure, environment and performance: the role of strategic choice, Sociology, 6: 1–22CrossRefGoogle Scholar
, 1997. Strategic choice in the analysis of action, structure, organizations and environment: retrospect and prospect, Organization Studies, 18(1): 43–76CrossRefGoogle Scholar
and , 2000. Explaining the variance in the performance effects of privatization, Academy of Management Review, 25(3): 581–590CrossRefGoogle Scholar
and , 1998. Privatization and the human factor, Journal of Applied Management Studies, 7(2): 201–210Google Scholar
, 2000. Entrepreneurial privatization strategies: order of entry and local partner collaboration as sources of competitive advantage, Academy of Management Review, 25(3): 551–571CrossRefGoogle Scholar
, and , 1994. The promise of infrastructure privatization, The McKinsey Quarterly, 1: 3–19Google Scholar
Economist, 1996. Leviathan re-engineered, October 19
Economist, 1998, Pocket World in Figures, London: Profile Books
Galal, A., Jones, L., Tandon, P. and Vogelsang, I., 1994. Welfare Consequences of Selling Public Enterprises, New York: Oxford University Press
, 1998. Reinventing government accountability: public functions, privatization, and the meaning of “state action,”Public Administration Review, 58(3): 247–257CrossRefGoogle Scholar
, 1997. Sustaining excellence in government: the Singapore experience, Public Administration and Development, 17: 167–1743.0.CO;2-#>CrossRefGoogle Scholar
Heracleous, L., 1999. Privatization: global trends and implications of the Singapore experience, International Journal of Public Sector Management, 12: 432–444
, 2001. State ownership, privatization and performance: an exploratory study from a strategic management perspective, Asia Pacific Journal of Management, 18: 69–81CrossRefGoogle Scholar
and , 2000. Singapore Telecom: strategic challenges in a turbulent environment, Asian Case Research Journal, 4(1): 49–77Google Scholar
, and , 2000. Microprocesses of institutional change in the context of privatisation, Academy of Management Review, 25(3): 572–580CrossRefGoogle Scholar
, 1998. The economic effects of privatization: evidence from a Russian panel, Comparative Economic Studies, 40(2): 75–102CrossRefGoogle Scholar
and , 1986. Privatization: a policy in search of a rationale, The Economic Journal, 96: 18–32CrossRefGoogle Scholar
, 1998. Elisabeth I and the limits of privatization, Public Administration Review, 58(2): 99–100CrossRefGoogle Scholar
, and , 1994. Privatization: lessons from market economies, World Bank Research Observer, 9(2): 241–272CrossRefGoogle Scholar
Knoop, C. I., Applegate, L. M., Neo, B. S. and King, J. L., 1996. Singapore unlimited: building the national information infrastructure, Harvard Business School Case, 9-196-012
, and , 1989. The Singapore telecommunications sector and issues affecting its competitive position in the Pacific region, Colombia Journal of World Business, Spring: 59–71Google Scholar
Lemke, D. K., Schminke, M., Clark, N. E. and Muir, P., 1999. Whither goest thou? Seeking trends in organization theory into the new millennium, Academy of Management Proceedings, OMT: D1–D6
, 1981. Research on state-owned enterprises – introduction, Management Science, 27(11): 1324–1325CrossRefGoogle Scholar
, 1997. Russian firms in transition: champions, challengers and chaff, Comparative Economic Studies, 39(2): 1–36CrossRefGoogle Scholar
Low, L., 1995. Privatization in Singapore: the big push, paper for Symposium on Privatization, organized by the Asian Productivity Organization, Bangkok, July 4–6
and , 1989. Diversification, systematic risk, and shareholder return: a capital market extension of Rumelt's 1974 study, Academy of Management Journal, 32(2): 454–465Google Scholar
and , 1997. How much does industry matter, really?, Strategic Management Journal, 18, Summer Special Issue: 15–303.3.CO;2-T>CrossRefGoogle Scholar
, and , 1994. The financial and operating performance of newly privatized firms: an international empirical analysis, Journal of Finance, 49, 403–452CrossRefGoogle Scholar
, 1997. Ideological motivations of privatization in Great Britain versus developing countries, Journal of International Affairs, 50(2): 391–407Google Scholar
Ministry of Trade and Industry, 1999. Economic Survey of Singapore, 1998, Singapore: SNP Publishers
, 1996. Managing government, governing management, Harvard Business Review, May–June: 75–83Google Scholar
Nellis, J., 1994. Is privatization necessary?, Public Policy for the Private Sector, Washington, DC: World Bank, May
, and , 2000. Curvilinearity in the diversification-performance linkage: an examination of over three decades of research, Strategic Management Journal, 21: 155–1743.0.CO;2-2>CrossRefGoogle Scholar
Porter, M. E., 1980. Competitive Strategy: Techniques for Analyzing Industries and Competitors, New York: Free Press
Porter, M. E., 1985. Competitive Advantage: Creating and Sustaining Superior Performance, New York: Free Press
, 1996. Privatizing services in local government: an empirical assessment of efficiency and institutional explanations, Public Administration Quarterly, Spring: 103–126Google Scholar
Price Waterhouse, 1996. Infrastructure privatization, paper prepared for USAID
, 2000. A multilevel model of privatization in emerging economies, Academy of Management Review, 25(3): 525–550CrossRefGoogle Scholar
, 1991. How much does industry matter?, Strategic Management Journal, 12: 167–185CrossRefGoogle Scholar
Rumelt, R. P., Schendel, D. E. and Teece, D. J. (eds.), 1994. Fundamental Issues in Strategy, Boston, MA: Harvard Business School Press
, 1993. A general critique of the theory on public enterprise: part II, International Journal of Public Sector Management, 6(5): 56–67Google Scholar
, 1995. Corporate strategy in the intelligent island: the case of Singapore Telecom, Industrial and Corporate Change, 4: 691–702CrossRefGoogle Scholar
Singh, K., 1998. Guided competition in Singapore's telecommunications industry, Presented at the 4th Annual Conference of the Consortium for Research on Telecommunications Policy and Strategy, University of Michigan, Ann Arbor, June
Singh, K., 1999. Singapore Telecom in Europe, Asean–EU Management Center Cases Series
Singh, K. and Ang, S. H., 1999. Governments in business: an empirical analysis of the strategies and success of government linked corporations in Singapore, Academy of Management Proceedings, PNS: C1–C6
, 1992. Singapore invests in the nation-corporation, Harvard Business Review, May–June: 4–11Google Scholar
So, J. and Shin, B., 1995. The private infrastructure industry – A global market of US$60 billion a year, Public Policy for the Private Sector, Washington, DC: World Bank
Straits Times, 1997. Singapore is tops for business … August 22
Straits Times, 1998a. PS21 turns three: Service best in Asia, May 25
Straits Times, 1998b. S'pore ranks third on Asia-Pac telecom index, January 13
Straits Times, 1999. S'pore is tops again in telecoms ranking, January 19
, 1992. Singapore Telecom: from public to private sector, International Journal of Public Sector Management, 5(4): 4–14Google Scholar
, and , 1993. Aftermarket share price performance of government-linked companies upon privatization, Securities Industry Review, 19(2): 25–31Google Scholar
and , 1990a. Towards greater competition in Singapore's telecommunications, Telecommunications Policy, August: 303–314Google Scholar
Toh, M. H. and Low, L., 1990b. Privatization of telecommunications services in Singapore, in J. Pelkmans and N. Wagner (eds.), Privatization and Deregulation in ASEAN and EC: Making Markets More Effective, Singapore: Institute of South East Asian Studies, National University of Singapore: 82–93
United States General Accounting Office, 1997. Privatization: Lessons Learned by State and Local Governments, March
and , 1992. Ownership versus competition: efficiency in public enterprise, Public Choice, 73: 205–239CrossRefGoogle Scholar
and , 1998. Institutional transformation and enterprise change in an emergent capitalist economy: the case of Hungary, Organization Studies, 19(2): 259–280CrossRefGoogle Scholar
and , 1989. Privatization: not the only answer, World Development, 17(5): 633–641CrossRefGoogle Scholar
, , and , 2000. Privatization and entrepreneurial transformation: emerging issues and a future research agenda, Academy of Management Review, 25: 509–524Google Scholar