BOOKS FOR MANAGERS 563

Managing and Marketing Services in the 199Os, Edited by Richard Teare, with Luiz Moutinho and Neil Morgan, Cassel, London, 1990, 255 pages, f25.00.

This book aims to bring together “research evidence relating to current trends, developments and practices in the service sector” and is based on papers presented at a conference on services research which was held in November 1988. The chapters, written by academics from various disciplines, have been amended after discussion, debate and the editing process. It is argu- able whether the title is the best descriptor of the book’s contents - the book reviews research in manag- ing and marketing services (rather than providing a practical guide); being research based, it relates largely to findings of the 1980s and not the 1990s; and it does not really cover the complete service sector, but has heavy emphasis on two areas of services - tourism and financial services.

The book is structured into four parts - Service Market Analysis, Strategic Developments for the 199Os, Managing Financial Services and Tourism, and Hospi- tality Management. The editorial team presents a brief context setting at the start of each part, and the book concludes with a three page summary of the key points raised in the papers. The form of research being reported in the chapters varies from desk studies to field research based on academic research topics or industry practice.

As in all books which are developed from conference papers, there are differences in style and level which no amount of editing can disguise. This book includes some wide-ranging articles (such as Peter Daniels’ “Geographical perspectives on the development of producer industries”) and also some very focused work (e.g. “Skew loss functions and required accuracy levels in probability forecasting for tourism” by Luiz Moutinho and Stephen Witt). Both types of articles have their place in the services literature, but it is a little disconcerting to find them in one book. However, this diversity of backgrounds and interests of the authors (including geographers, marketers, economists, accountants and operations management specialists) is also one of the book’s strengths. Awareness of issues identified by research in different areas helps explain what is happening in service businesses. Indeed, several of the researchers in this book address the need to broaden the base of research in order to develop knowledge. Another problem with a book of contribu- tions from several authors is that ideas are never really “integrated” into the materials, with the effect that many questions are raised, but are not really explored in later chapters.

This book will be useful to those who are studying and researching in services. Although it is not comprehen-

sive in its coverage of service sectors, authors in the early parts of the book do refer to a wide range of service business - e.g. consultancy and business services, gas supply, retailing, and communications are mentioned. However, those whose interest lies outside the key topic areas of tourism and financial services will probably only read the first half of the book.

This book doesn’t really address practitioners’ needs, given its largely academic content and the limited amount of direct guidance. Some contributions raise interesting points which practitioners in service businesses ought to be considering. For example, Emert Gummersson’s “Marketing organization in service businesses: the role of the part-time marketer”, which examines the roles of customers, front-line personnel, back office and company management in the market- ing of services is not only highly relevant, but is written in a style which is suited to practitioners. Other chapters have valid messages, but are not written in such “manager friendly” style.

The timing of the book (and this review) is unfortunate, with oil prices rising rapidly, the Guinness scandal having rocked the City and uncertainty about the economy. In 1990, few people would have great confi- dence in identifying the key issues for managing and marketing of business through the 1990s and many would have divergent views on the future of service industries. Pessimism over the timing of the book may be unjust, but the effects of the “oil crisis” in the 1970s on tourism caused the main “blip” in this sector’s phenomenal growth in recent years. Perhaps the effects of the current environment would have been less likely to concern the reader if the spread of service activities receiving attention had been broader and the issues identified more transferable across service sectors.

Despite these points, we do need to know more about managing services, and we do need to undertake more research across traditional department and subject areas. This book offers valuable insight into some of the different perspectives on managing services. Perhaps these papers identify some of the issues for the 199Os, but even if they don’t, it is a useful record of recent thinking.

Lynn Parkinson

The Finance, Investment and Taxation Decisions of Multinationals, Julian S. A/worth, Basil Blackwell, Oxford, 1988, ISBN O-631-14818-3, 290 pages.

The interface of economics and finance is an important area of research, particularly when concerned with the

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operations of multinational firms. Alworth’s book is a largely successful foray into this crucial but largely neglected area. Its main omission is its failure to connect with the dominant internalization/transactions cost approach to the multinational enterprise.

The relationship between long-term (direct) investment decisions and short-term financing and taxation policies of multinational enterprises is of vital impor- tance both from a management point of view and from the external standpoint of the impact on the world economy and individual national economies. These issues are examined briefly in Chapter 2, which uses basic statistics to show the importance of the multi- national firms in the world economy and includes a cursory analysis of factors influencing the growth of such firms. Double taxation relief provisions are analysed and some evidence on the tax take from multi- nationals is given. Different systems of taxing company earnings (personal and corporate) are described in the context of a binational company. The taxation of income is summarized in terms of two elementary parameters: (1) the rate of tax on profit as defined for tax purposes, and (2) the opportunity cost to share- holders of net dividends distributed by the foreign operations and received by the ultimate shareholders of the parent company. This, according to Alworth, allows comparison across various types of tax systems and methods of double taxation relief and the para- meters can be used to compare various financial strategies, compute the cost of capital, estimate the effect of the taxation of dividend repatriations and estimate the fiscal incentives to various forms of intracompany transfer pricing decisions. These are the tasks of the succeeding chapters.

The advantages of multinational firms over purely national ones in financial policies are first, that a wider range of taxation avoidance policies can be followed and second, that multinationals have the opportunity of exploiting intracompany interest accounts to mini- mize their overall tax bill and thereby reduce their overall financial cost of capital. Alworth’s analysis illustrates the relative effects of various types of company tax systems and methods of double taxation relief on the financing decision, although no general conclusion is reached on what might be a “neutral” tax. Deferral provisions are shown to lead to the accumulation of profits in low tax countries and to incentives for fictitious pricing of intracompany financial transactions.

The impact on the capital costs of the binational firm of the interaction of the tax system and the definition of taxable profits is the subject of Chapter 6. The theoretical model is applied to the specific case of investment by UK firms in Germany. In Chapter 7, the payment behaviour of British multinational companies

is shown to be more sensitive to tax changes affecting dividends than that of companies which operate in only one tax jurisdiction. Thus cross-border intra- company dividends adjust more quickly to tax changes than dividend payments to ultimate shareholders.

Chapter 8 examines the impact of various company tax systems on the prices of intermediate inputs and examines the effects of government regulations on the allocation of resources between different sections of the firm. This chapter also examines the constraints of fiscal policies on transfer prices and the extent to which these are translated into distortions of production decisions.

The final chapter draws on the traditional literature on modelling the welfare effects of factor movements in a general equilibrium framework. Traditional optimal tax rules in open economies are shown to be ambiguous when the interaction between terms of trade and the terms of borrowing and lending are allowed for.

This book represents a considerable advance in the examination of finance, investment and taxation decisions of multinationals. More importantly, it lays the basis for progress in the opportunities for extend- ing its analysis by, for instance, incorporating exchange rate movements (or rather deviations from purchasing power parity). Further integration of its findings with the wider international business literature would also be welcome.

Peter J. Buckley University of Bradford Management Centre

Mind of a Manager - Soul of a Leader, f3y Craig R. Hickman, Published byJohn Wiley & Sons, 1990, ISBN O-471 -617156, $19.95.

The New General Manager, Sy Paul Theme, Published in the Henley Management Series by McGraw Hill, 1989, ISBN o-077-07083-6, no price indicated.

General Management is back in fashion again and there are a number of serious books on the market which make a pitch for this important group. It is well described by Thorne in his preface, “These General Managers are almost all under 45 . . . ambitious, work driven, capable, . . . highly analytical . . . often left very much to their own devices with limited specialist advice and . . little supervision”, but Thorne also promises that this period of great stress will be seen by new general managers as the “most exciting, rewarding and stimulating occupation of their lives”.

These two books are different in style but share some common features. There is a positioning of the