4 - Family Ownership and Managerial Control

Summary

Introduction

When we look at corporate governance of firms a number of questions come to mind. Does the country of origin matter? Has the level of concentration of ownership influenced the growth and survival of firms? Who manages these firms? How has their ownership and control evolved over time? This chapter analyzes these questions, focusing on the evolution of the predominant governance structures of the leading multinationals in alcoholic beverages.

Country of origin

As we noted before, the leading firms in the world originate both from “outsider” and “insider” systems of corporate governance. Table 4.1 uses this classification to aggregate those firms with published accounts into these two groups. The United States, United Kingdom, Canada, Australia, and South Africa are grouped as “outsider” systems. Continental Europe, Japan, and South America are grouped as “insider” systems of corporate governance. This Table provides, for each firm, the average sales in each decade: 1961–1970, 1971–1980, 1981–1990, 1991–2000, and 2001–2005.

In the 1960s, the number and size (measured by sales volume) of firms originally from the outsider systems was much higher than that of firms from insider systems. This is what one might expect from a neoclassical perspective. Open systems should make for more competitive firms. In contrast, by 2004 the number of firms from outsider systems was similar to that of firms from insider systems.