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Financialization and Business Strategy: The
need for bridging efforts
Abstract Number: 051-1016
São Paulo Business Administration School – Getulio Vargas Foundation (FGV-EAESP)
Department of Production Management and Industrial Operations Av. 9 de Julho, 2029 - 01313-902 - São Paulo - SP – Brazil. Phone: (55) 11 3799-3728
[email protected] • [email protected]
POMS 25th Annual Conference
Atlanta, GA, USA
May 9 to May 12, 2014
Jonas Lucio Maia Luiz Carlos Di Serio
The “finance view of the firm” has evolved since the 80´s,
conceptualizing the firm as a portfolio of assets that must have its
performance maximized (Di Maggio, 2001)
Such view also evolves to the “Shareholder value generation”
concept, which advocates that maximizing shareholder value
(wealth) is the ultimate firm goal (Fligstein, 2002).
These deep changes in business and economics contexts lead to the
assumption that process and contents of business strategy are
impacted by both the finance view of the firm and by the goal of
shareholder value generation.
Few contributions mention the “strategy financialization” term, that
according to Dias e Zilbovicius (2006) is a “process in which capital
valorization via financial system is preferred compared to valorization
via manufacturing operations”.
Introduction
“Strategy financialization” aspects have already been found during
one of the authors (Maia, 2010) PhD research on competitive strategy
practices in Brazil, to mention:
High level of utilization of financial tools during the strategy
formulation and implementation process , and also typical strategy
tools used with a financial focus;
Strong relation (that in some cases evolve to direct reporting)
between the organizational area (department, management,
direction) responsible for Strategic Planning and Financial or M&A
areas;
Strong analytical profile of strategy senior executives, and in some
cases they have developed their careers inside financial industry.
Prior research findings
The main objective of this work is:
Given the impacts that the Financialization process may have on
Business Strategy, conduct a preliminary bibliometric analysis on
the combination of both terms, to explore the body of literature in
such area (intersection of financialization and strategy).
Research method:
Research on Thomson Reuters Web of Science (WoS), using
selected keywords. Results will be analyzed using VOSViewer (Van
Eck & Waltman, 2010) and analysis tools provided by WoS.
Objectives and Method
First research “atempt” used the keywords “Financialization/
Financialisation” (both in British and American English) and the terms
“Business Strategy” or “Competitive Strategy”, connected with the
Boolean operator “AND”.
Search yielded only 1 paper, demonstrating the lack of papers
connecting both areas.
Data and Analysis #1 (Financialization and Strategy)
Second, we used the keywords “Financialization/ Financialisation”
(both in British and American English) but expanded strategy levels to
“Business Strategy”, “Competitive Strategy”, “Corporate Strategy” and
“Operations Strategy” (connected with the Boolean operator “AND”).
Search yielded 3 papers, also demonstrating the lack of papers
connecting both areas.
Data and Analysis #2 (Financialization and Strategy)
With the sample of 3 papers, VOSViewer was used to extract most
relevant terms (from title and abstract) and couple them according to
their relationship.
Data and Analysis #2 (Financialization and Strategy)
Third, given the very small number of results in the first two attempts, we
used only the keywords “Financialization/ Financialisation” (both in
British and American English).
With this general search, the idea was to explore:
1. Terms generated by VOSViewer to identify whether (and how) they
are connected to typical strategy terms;
2. Publication journals, to identify whether research on
Financialization has been published in typical strategy journals (eg.
Harvard Business Review, Strategic Management Journal, etc).
Search yielded 410 results, a much higher number when compared to
the two previous attempts;
Data and Analysis #3 (Financialization – Overall)
1. Terms related to strategy: VOSViewer term extracting process generated the below diagram, and identified three distinct clusters: Blue, related to financial crisis; Red, related to capitalism, economy and accumulation; Green, related to market and investment. No terms with direct connection to strategy.
Data and Analysis #3 (Financialization – Overall)
2. Typical strategy publication journals: Using Web of Science analysis tools, we identified the main journals where the 410 papers were published. Although such base can be considered “scattered” (TOP 25 journals account for only 45% of the sample), such journals are typically related to economics, politics or accounting issues. No typical strategy journals appear in the results.
Data and Analysis #3 (Financialization – Overall)
2. Typical strategy publication journals: Using VOSViewer we could create co-citation network of sources (min 80). Three clusters emerge, generally dealing with economics, politics or accounting issues. No typical strategy journals appear in the generated diagram.
Data and Analysis #3 (Financialization – Overall)
Although both “financialization” and “strategy” concepts are
intrinsically linked (strategy is about overcoming competition and
meeting company goals – and both are changing in a financialized
context), the literature seems to be devoting restricted attention to
such connection:
Bibliometric research coupling both concepts produced only 1 result if just business/competitive strategy is analyzed, or just 3 results if concept is expanded to corporate or operations strategy very few results considering the representative power of Web of Science as a source for this kind of research;
In a more general bibiliometric research only on “financialization”, no strategy related terms figured among most frequent terms;
Evaluating both the journals where sample papers were published, and also the journals they cite, no typical strategy journals could be identified people typically conducting research on strategy may not be in contact with research on financialization.
• Thus, bridging efforts are needed to “connect” research on both worlds,
which contents are intrinsically linked.
Conclusions and Final Remarks
DIAS, A. V. C; ZILBOVICIUS, M. A produção face à financeirização:
quais consequências para a organização da produção e do
trabalho? XXVI ENEGEP – Encontro Nacional de Engenharia de
Produção. Anais do XXVI ENEGEP, Fortaleza, 2006.
DIMAGGIO, P. The twenty-first-century firm: changing economic
organization in international perspective. Princeton, Nova Jersey,
Princeton University Press, 2001.
FLIGSTEIN, N. The architecture of markets: An economic sociology of
twenty-first-century capitalist societies. Princeton: Princeton University
Press, 2002.
MAIA, J. L. Gestão Competitiva em Empresas Brasileiras: a prática da
estratégia por meio de suas visões, ferramentas e atores do processo.
Tese de Doutorado (Engenharia de Produção). Universidade Federal
de São Carlos, 2010.
Cited References
