Management strategy and HR in international mergers: choice,constraint and pragmatism

The article combines consideration of the range of contextual factors that impact on management strategy and HR in the post‐merger period (such as corporate structures and cultures, pressures from shareholders and regulatory and legal environments at national and international level) with an examination of the interests and power of various groups of actors within the firm. Specifically, we apply a framework which integrates the insights of market‐based, institutionalist and micro‐political approaches. We locate our analysis within the relevant international HRM literature, most notably recent debates concerning multinational corporation (MNC) merger dynamics. International mergers and acquisitions provide particularly useful scenarios through which to explore the interdependence between choice and constraint, illustrated here by processes of negotiation, compromise and balance across a range of issues in several case study organisations. The key areas highlighted concern: (1) the integration of HR strategies, and (2) processes of post‐merger rationalisation.     

The effect of enhanced competition on the equity values of the regional bell operating companies

Recent developments in the telecommunications industry have increased the likelihood that the Regional Bell Operating Companies (RBOCs) will face new competition in the market for local telephone services. These developments include (1) regulatory decisions by the Federal Communications Commission (FCC) to facilitate competitive entry or the application of new technologies (e.g. personal communications services) to the local communications market, and (2) strategic decisions by AT&T, MCI Communications, and Time-Warner to enter the local communications market. The entry of new firms is expected to reduce the cash flows of the RBOCs. Using the event study methodology, this paper examines the announcement effects of several of these developments on the values of the RBOCs. Collectively, the announcements are associated with a significant decline in the aggregate value of the RBOCs.     

The Structure and Conduct of Corporate Lobbying: How Firms Lobby the Federal Communications Commission

This paper examines the amount and organization (individual vs. collective) of lobbying by firms in administrative agencies. It explores the power and limitations of the collective-action theories and transaction-cost theories in explaining lobbying. It introduces a dataset of over 900 lobbying contacts covering 101 issues at the Federal Communications Commission (FCC) in early 1998. It finds that the structure and conduct of large-firm lobbying at the FCC is consistent with the predictions of theories of transaction costs and the main results of theories of collective action. Small firms show little sensitivity to collective-action issues or transaction-cost issues in the organization of their lobbying, but they do lobby less when having to reveal proprietary information. In sum, large firms behave in a manner largely consistent with theoretical predictions, while small firms do not.     

Vertical Integration and Proprietary Information Transfers

Suppose that rival downstream producers of a final good contract with the same upstream supplier of an input and, in the process, reveal private information. A vertical merger between the upstream supplier and one of the downstream firms may dissipate the information advantage of the remaining downstream firms. The welfare consequences of such a merger and related information sharing depend on the value of information, the benefits of integration apart from information sharing, and the nature of upstream competition. In this paper, conditions are found under which owners of a vertically integrated firm are better off breaking up into independent firms. This result may explain AT&T's recent spinoff of Lucent Technologies. Further results suggest that a prohibition on information transfers, such as that often proposed by the Federal Trade Commission and Department of Justice as a precursor to approving vertical mergers, may actually reduce expected consumer surplus and expected social welfare.     

审计师选择与业绩承诺精准达标——基于中国借壳上市公司的经验证据

在借壳交易中，对借壳方（非上市公司）财务报告执行审计的审计师可以是壳公司（上市公司）的现任审计师，也可以是新任审计师。以2011—2020年完成借壳上市并签订业绩补偿承诺的我国A股借壳交易案件为样本，检验借壳上市审计师选择对借壳公司业绩承诺实现情况的影响。研究发现，与保留壳公司现任审计师的借壳公司相比，借壳上市交易中选择新审计师的借壳公司更可能在业绩承诺期间精准实现业绩承诺，盈余管理是借壳交易中审计师选择影响借壳公司精准实现业绩承诺的作用渠道。此外，当业绩承诺补偿方式为股份补偿以及借壳交易双方为关联方时，借壳交易中选择新审计师的公司对业绩承诺精准达标的正向作用更加显著。进一步研究发现，借壳上市交易中选择新审计师的公司更可能在业绩承诺到期后经历业绩滑坡，且大股东更可能在锁定期结束后减持股票。结果表明，与保留壳公司现任审计师的借壳公司相比，借壳交易中选择新审计师的借壳公司的机会主义行为更严重。     

Business ethics: the materiel/manufacturing perspective

The discussion of purchasing practices and product integrity, which have ethical implications for materiel/manufacturing management, serves to illustrate how routine decisions can have larger implications for the firm as a whole. Management needs to take a proactive role in confronting ethical issues by (1) demonstrating a corporate commitment to sound ethics in business practices, (2) providing written policies where appropriate to provide a basis for sound ethical conducts, (3) educating various functional areas to understand their responsibility in seeming unrelated ethical problems, (4) delegating authority in ethical issues where such issues are considered in decision making, and (5) fostering interfunctional communication as a means in establishing corporatewide responsibility. The basic philosophical principles of JIT serve as a blueprint for recognizing and managing ethical responsibility. The unexpected by-products of a JIT implementation may be vendor/customer good will and an excellent reputation for the firm.     

Information markets, product markets and vertical merger

In many markets, firms have the option of advertising at price comparison sites to broaden their market reach. Such sites are often controlled by profit-maximizing “information gatekeepers” charging advertising fees. This paper considers vertical merger between such a monopoly information gatekeeper and a firm in the product market. We find that: (i) If the integrated firm can act as a price leader before independent firms make advertising and pricing decisions, then the merger is profitable. (ii) If the integrated firm cannot move first, then the merger is unprofitable, or divestiture is optimal in the case where the firm has already created the gatekeeper. As a result, the merged entity has an incentive to invest in technologies to support a price leader.     

并购中的业绩承诺条款与股价崩盘风险

本文以2008—2016年有业绩承诺的A股上市公司为样本，研究了并购中业绩补偿承诺条款的设置与兑现对并购业绩的影响，以及并购业绩未达预期产生的经济后果。研究发现，设定高增长率的业绩目标对并购业绩完成具有负面作用，采用股份补偿、非累计补偿、减值测试补偿以及双向业绩对赌对并购业绩实现具有积极作用。在承诺兑现过程中，承诺后期业绩目标压力更大，业绩完成率更低。在业绩承诺完成的经济后果方面，本文发现，未完成业绩承诺的并购相对于完成承诺的并购具有更高的股价崩盘风险，进行盈余管理的并购相对于未进行盈余管理的并购具有更高的股价崩盘风险。     

Distressed exchange,bargaining power,and prior capital structure

Financially troubled companies often make Distressed Exchange (DE) offers to its creditors, to postpone costly bankruptcy reorganization. We derive the optimal terms and timing of a DE offer consisting of debt reduction and an equity stake in the restructured firm. The DE terms and timing are affected by shareholder bargaining power, with greater shareholder bargaining power resulting in earlier DE offer, smaller debt reduction and smaller equity stake. The impact of shareholder bargaining power is greater when bankruptcy cost is larger and tax rate is higher. We also show that renegotiability of debt increases ex-ante firm value and results in a higher optimal leverage ratio. Both firm value and optimal leverage ratio are decreasing functions of shareholder bargaining power.     

Experiments Testing Multiobject Allocation Mechanisms

This paper reports the results of over 130 auctions conducted under controlled conditions to examine the robustness of several auction mechanisms to allocate multiple objects. The simultaneous discrete auction process used by the Federal Communications Commission to allocate Personal Communications licenses was contrasted with a sequential auction and a combinatorial auction over a variety of demand conditions. In test environments created to check only the minimum competency of the procedures, the simultaneous discrete auction process produces highly efficient allocations, approaching levels similar to those found with a continuous form of the auction, and it outperforms a sequential auction. However, in environments created to stress test the procedures, a combinatorial auction outperforms the simultaneous discrete auction.     

Chapter 11 bankruptcy and the termination of collective bargaining contracts

In 1984 the Supreme Court ruled that employers can unilaterally break an existing collective bargaining contract upon filing a chapter 11 bankruptcy petition. This ruling changed both the contractual responsibilities of the employer to honor the collective bargaining agreement and the rights that workers have under the National Labor Relations Act. The purpose of this article is to show the conditions under which a Chapter 11 bankruptcy proceeding will lead to the termination of a labor contract. Our results suggest that (a) legal rulings that reduce the costs of bankruptcy will increase the number of contractual dissolutions and (b) a Chapter 11 bankruptcy is more likely to occur when a firm operates in a climate of uncertain expectations.     

Up in the Air: GTE's Experience in the MTA Auction for Personal Communication Services Licenses

In late 1994, GTE, one of the largest telecommunications firms in the world, entered an auction for the rights to provide personal communications services (PCS) using the electromagnetic spectrum. The administering agency, the Federal Communications Commission, adopted a novel multiple-round format for the PCS auction. The format presented GTE with a complex bidding problem. This article describes how the GTE bidding team answered the following question: Given its budget and valuations and the information available about rival bidders, how should GTE bid to achieve the best attainable outcome?     

Shaping the bargaining agenda. The Audit Commission and public service reform in British local government

This article examines the role of the Audit Commission (AC) in local government collective bargaining. While the AC has no official role in such bargaining, it has a role in monitoring the performance of local government services. In this role the AC has a clear potential, in the context of the government's ‘modernization’ agenda – as manifested in its ‘Best Value’ regime, for influencing both the content of collective agreements, and the process of collective bargaining, where these are seen to conflict with other Best Value objectives – particularly in relation to external competition. The research conducted involved a content analysis of AC inspection reports on human resource services and longitudinal case studies of two local authority union branches' experiences of Best Value and the role of the AC. The findings from the inspection reports indicate that, while the AC is actually acting to promote activities that could be seen as supportive of union bargaining agendas, notably in relation to equality type issues, they are also supporting service externalisation and thereby acting to limit the scope of their impact. The reports also indicate that, despite there being prescribed ‘best practice’ for local government employment relations (‘social partnership’ with unions), the AC is not promoting any such engagement with unions. Evidence from the case studies add weight to these observations: the AC, in one case, was deeply suspicious of an attempted union management agreement on procurement, while in the other, the AC made no criticism of the costly effects that externalization had on union-management relations.     

Downstream Competition, Bargaining, and Welfare

I analyze the effects of downstream competition when there is bargaining between downstream firms and upstream agents (firms or unions). When bargaining is over a uniform input price, a decrease in the intensity of competition (or a merger) between downstream firms may raise consumer surplus and overall welfare. When bargaining is over a two-part tariff, a decrease in the intensity of competition reduces downstream profits and upstream utility and raises consumer surplus and overall welfare. Standard welfare results of oligopoly theory can be reversed: less competition can be unprofitable for firms and/or beneficial for consumers and society as a whole.     

The FCC Spectrum Auctions: An Early Assessment

This paper analyzes six spectrum auctions conducted by the Federal Communications Commission from July 1994 to May 1996. These auctions were simultaneous multiple-round auctions in which collections of licenses were auctioned simultaneously. This auction form proved remarkably successful. Similar items sold for similar prices, and bidders successfully formed efficient aggregations of licenses. Bidding behavior differed substantially in the auctions. The extent of bidder competition and price uncertainty played an important role in determining behavior. Bidding credits and installment payments also played a major role in several of the auctions.     

A data envelopment analysis of gas utilities' efficiency

This study examines the Natural Gas Policy Act of 1978 and Federal Energy Regulatory Commission (FERC) policies that culminated in Order 636 in 1992. The regulatory environment in which natural gas distribution utilities operate was altered. FERC policies forced local gas distribution utilities into an increasingly competitive environment. Restructuring of the industry may affect economic efficiency. Data Envelopment Analysis is used to examine the economic efficiency of gas distributors during 1975–94. Federal policy appears to lead to a reduction in scale due to restructuring and more competition. Reduced scale economies have not altered the economic efficiency of the utilities.     

A Note on Measuring the Productivity Offset for Regulatory Purposes

Calculation of the productivity offset or the X-factor used in setting price caps has a fundamental flaw when it is based on conventional growth accounting total factor productivity analysis. The problem is discussed in the context of incentive regulation used by the Federal Communications Commission in the United States and the appropriate correction is indicated. An example of the problem and its correction, using the access charge for interstate service in telecommunications, is provided. The correction shows that the appropriate X-factor is 12 percent greater than that based on conventional growth accounting total factor productivity analysis.     

Unionisation structures, productivity and firm performance: New insights from a heterogeneous firm model

This paper introduces collective bargaining at the firm and at the sector level into the heterogeneous firm model of Melitz and Ottaviano (Melitz, M. J., Ottaviano, G. I. P., 2008. Market size, trade, and productivity. Review of Economic Studies 75 (1), 295-316). It then analyses how the two bargaining regimes change aggregate industry productivity and firm performance relative to a competitive labour market. While sector-level bargaining forces the least productive firms to exit and thus increases average productivity relative to the competitive benchmark, firm-level bargaining allows less productive firms to stay in the market and thus reduces average productivity. Sector-level bargaining also results in higher average output and profit levels than either firm-level bargaining or a competitive labour market. The paper also shows that the choice between sector- and firm-level bargaining can involve a trade-off between product variety and product prices: Not only the average price level but also product variety tends to be lower under sector-level bargaining than under firm-level bargaining.     

Laboratory Experimental Testbeds: Application to the PCS Auction

The paper reviews the uses of laboratory experimental economics methods in the background research and implementation of the Personal Communication Systems auctions held by the Federal Communications Commission. The applications began during the rule making process with the testing of broad rules that might be implemented. Data from experiments were systematically used. The methods were used again in the software development process where several important contributions were made. Finally, experiences gained from the study of experimental auction processes were used in the actual management of the first auctions and in interpreting auction performance.     

Rising wage inequality,the decline of collective bargaining,and the gender wage gap

This paper investigates the increase in wage inequality, the decline in collective bargaining, and the evolution of the gender wage gap in West Germany between 2001 and 2006. Based on detailed linked employer–employee data, we show that wage inequality is rising strongly — driven not only by real wage increases at the top of the wage distribution, but also by real wage losses below the median. Coverage by collective wage bargaining plummets by 16.5 (19.1) percentage points for male (female) employees. Despite these changes, the gender wage gap remains almost constant, with some small gains for women at the bottom and at the top of the wage distribution. A sequential decomposition analysis using quantile regression shows that all workplace related effects (firm effects and bargaining effects) and coefficients for personal characteristics contribute strongly to the rise in wage inequality. Among these, the firm coefficients effect dominates, which is almost exclusively driven by wage differences within and between different industries. Labor demand or firm wage policy related effects contribute to an increase in the gender wage gap. Personal characteristics tend to reduce wage inequality for both males and females, as well as the gender wage gap.