When Corporatism Leads to Corporate Governance Failure: The Case of the Swiss Watch Industry

Schluep Campo, I. and Aerni, P. 2016. When Corporatism Leads to Corporate Governance Failure: The Case of the Swiss Watch Industry. Banson, Cambridge, UK.

124 Pages Posted: 22 Aug 2018

See all articles by Isabelle Schluep

Isabelle Schluep

Center for Corporate Responsbility and Sustainability

Philipp Aerni

Center for Corporate Responsibility and Sustainability (CCRS) at the University of Zurich

Date Written: July 1, 2016

Abstract

Corporatism is often seen as the way Swiss stakeholders in business and politics are handling industrial challenges in a reasonable and flexible way. The following paper argues, however, that the emergence of corporatist structures in the Swiss watch industry has often encouraged rent-seeking and collusion at the expense of innovation and competition. This legacy makes it currently difficult for the industry to effectively respond to new technological challenges and changing societal preferences in the global watch business. The book draws on archival sources, accessible since 2015, that have also been extensively discussed in the Swiss print media in early 2016. They provide increasing evidence of corporate governance failure in the 1983 merger of SSIH (Société suisse pour l’industrie horlogère) and ASUAG (Allgemeine Schweizerische Uhrenindustrie AG) that led to today’s Swatch Group. The merger, induced by the Swiss banks, was portrayed as a necessary step to save the two allegedly bankrupt watch companies. Yet, the archival sources show that ASUAG had already been successfully restructured and ready to conquer global markets with its new product, the Swatch.

Keywords: Corporatism, Swatch Group, Smart Watch, Creative Destruction

JEL Classification: D22, D42, K21, L12, L16, L41, N63, P16, P23, P48

Suggested Citation

Schluep, Isabelle and Aerni, Philipp, When Corporatism Leads to Corporate Governance Failure: The Case of the Swiss Watch Industry (July 1, 2016). Schluep Campo, I. and Aerni, P. 2016. When Corporatism Leads to Corporate Governance Failure: The Case of the Swiss Watch Industry. Banson, Cambridge, UK.. Available at SSRN: https://ssrn.com/abstract=3229779

Isabelle Schluep

Center for Corporate Responsbility and Sustainability ( email )

Zähringerstrasse 24
Zurich, 8001
Switzerland

Philipp Aerni (Contact Author)

Center for Corporate Responsibility and Sustainability (CCRS) at the University of Zurich ( email )

Zähringerstrasse 24
Zurich, CH-8001
Switzerland
044 634 40 60 (Phone)

HOME PAGE: http://www.ccrs.uzh.ch/en/organization/people/pa.html

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