Pathways to Success in M&A

For many if not most publicly traded companies, acquisition capabilities remain a critical component of sustainable longterm growth and profitability. And even as investors press companies to return excess capital through dividends and stock buybacks, the market continues to assign premium valuations to companies that earn above-average returns through a combination of internal investment and judicious acquisition spending.
This article begins by describing major challenges facing acquirers in the current business and regulatory environment. Then, after showing how M&A can be used to address strategic goals, the authors identify key elements in the M&A strategies of three highly successful companies: General Electric, Danaher, and Illinois Tool Works.     

Pay Comparability Across and Within UK Boards: An Empirical Analysis of the Cash Pay Awards to CEOs and Other Board Members

Drawing on the literature on social comparison and equity theories, this paper analyses the determinants of, and the relationships between, the cash pay awards of CEOs and other board members for a sample of large UK companies over the period 1992–95. Our results suggest that external labour market and internal (i.e., within board) pay comparisons are important in explaining both CEO and other directors' pay awards. In the case of CEOs, however, there is evidence of an asymmetric adjustment to prior period pay anomalies, whereby the pay of the relatively underpaid executives displays significantly greater sensitivity to external market comparison pay levels. This asymmetric adjustment process results in a 'bidding-up' of average CEO pay relative to other board members over the four year period investigated.     

The emergence of the 'accountant' in the institutions of Ancient Egypt

This paper examines the emergence of, and the roles played by accountants in some of the institutions of ancient Egypt. The paper documents evidence relating to the importance of the scribal occupation compared to other occupations available to the young Egyptians, and traces the emergence and functioning of scribal schools in which the pupils learned how to read and write and how to master numerical skills. Thereafter, the paper provides some illustrative examples of the diverse activities of the scribes in accounting for both the public (state) and private economic domains. The paper argues that right from the dawn of the dynastic era in Egypt (3000 B.C.) by dint of placing themselves at the centre of economic relations, the scribes (accountants) were among the most esteemed in society and the scribal occupation was one of the most prestigious occupations. The paper also argues that accounting then, just as it remains today, held a central position in the economic, social and political settings throughout the long and illustrious history of ancient Egypt.     

Credit rationing, interest rates and capital accumulation

A simple endogenous growth model is developed to characterize credit rationing through the capital accumulation process. The model shows that credit rationing on investment loans decreases as capital accumulates and the enforcement cost decreases. We find that the evolution of the interest rate factor (lending interest rate/depositing interest rate) has a similar pattern to the credit rationing probability. However, simulations show that the evolution of the interest rate spread through the capital accumulation process depends on the degree of the enforcement cost. In the empirical part of the paper, we consider fifty-two countries, at different stages of development, over the period 1995–2005. We confirm the theoretical findings relative to the evolution of the interest rate spread and interest rate factor with capital accumulation. These results suggest that, for economies endowed with costly contract enforcement, the interest rate factor could be a better proxy of credit rationing than the interest rate spread.     

Organisational change, outsourcing and the impact on management accounting

New empirical evidence is presented on organisational change, outsourcing and the impact on management accounting in three types of organisations: private sector companies, the National Health Service and Local Authorities. Spearman rank correlations are used to examine three propositions: that (i) change in organisational form exists and may be related to an increased use of outsourcing or subcontracting; (ii) outsourcing is expected to improve organisational flexibility and/or the service of an activity, to lead to cost savings, or to allow the organisation to focus more clearly on its core business; and (iii) outsourcing promotes change in management accounting. Statistical support is found for each of our three propositions. This is further supported by reference to three illustrative case studies. Overall, we conclude that organisational change, as effected by the use of outsourcing, is related to specific changes in the organisations' management accounting systems.     

Application of ANFIS to exchange rate forecasting

The need of exchange rate forecasting in order to preventing its disruptive movements has engrossed many policy-makers and economists for many years. The determinants of exchange rate have grown manifold making its behavior complex, nonlinear and volatile so that nonlinear models have better performance for its forecasting. In this study the accuracy of ANFIS as the nonlinear model and ARIMA as the linear models for forecasting 2, 4 and 8 days ahead of daily Iran Rial/∈ and Rial/US$ was compared. Using forecast evaluation criteria we found that nonlinear model outperforms linear model in all three horizons.     

Developing countries' strategic opportunities

The rapid transition from the industrial age to the knowledge age may require developing nations to reassess their strategies toward the attraction of foreign investment. Highly focused technology villages based on the creation of industry-specific technology infrastructures blended with educated and trained nationals may be the best alternative for benefiting from the global economic changes. © 1998 John Wiley & Sons, Inc.