In 1991 the chairman of the General Dynamics Corporation, William Anders, announced that he was going to transform his corporation, one of the largest prime defense contractors in the nation, into a share holder driven enterprise. Management embarked on an explicit strategy of creating shareholder value through divestiture, downsizing, arid an executive compensation plan that linked executive pay to stock price. General Dynamics realized a 440 percent return between 1991 and 1993, compared to the industry average of approximately 110 percent, and upperlevel management received record bonuses (Dial and Murphy 1995). During this same period, the corporation reduced its workforce by 64 percent, laying off thousands at its few remaining plants. General Dynamics cut its capital expenditures by half while steadfastly refusing to explore opportunities for commercial production. [download]
Format : Ebook.Pdf
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