Implications of Financial Capitalism for Employment Relations Research: Evidence from Breach of Trust and Implicit Contracts in Private Equity Buyouts

An increasing share of the economy is organized around financial capitalism, where capital market actors actively manage their claims on wealth creation and distribution to maximize shareholder value. Drawing on four case studies of private equity buyouts, we challenge agency theory interpretations...

Full description

Saved in:
Bibliographic Details
Published inBritish journal of industrial relations Vol. 51; no. 3; pp. 498 - 518
Main Authors Appelbaum, Eileen, Batt, Rose, Clark, Ian
Format Journal Article
LanguageEnglish
Published London Blackwell Publishing Ltd 01.09.2013
Subjects
Agency theory
Buyouts
Capital
Capital market
Capital markets
Capitalism
Contracts
Employment
Equality
Equity
Labor relations
Labour relations
Management
Markets
Private equity
Stockholders
Studies
Trust
Wealth
Welfare economics
Online AccessGet full text

Cover

More Information
Summary:An increasing share of the economy is organized around financial capitalism, where capital market actors actively manage their claims on wealth creation and distribution to maximize shareholder value. Drawing on four case studies of private equity buyouts, we challenge agency theory interpretations that they are ‘welfare neutral’ and show that an alternative source of shareholder value is breach of trust and implicit contracts. We show why management and employment relations scholars need to investigate the mechanisms of financial capitalism to provide a more accurate analysis of the emergence of new forms of class relations and to help us move beyond the limits of the varieties of capitalism approach to comparative institutional analysis.
Bibliography:ArticleID:BJIR12009
istex:829F3C7A176E5D52E8B69F81BFE6BB461D0F2A1F
An earlier version of this article was presented at the BJIR 50th Anniversary conference in December 2011 at the London School of Economics. The authors would like to thank the anonymous referees and Paul Edwards for constructive criticism on a previous version of the paper. Office management and finance management at the University of Birmingham was provided by Jane Whitmarsh and Jacqui Ward.
ark:/67375/WNG-GB6JWH2S-5
ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ObjectType-Article-1
ObjectType-Feature-2
ISSN:0007-1080
1467-8543
DOI:10.1111/bjir.12009