Research notes and communications management objectives in mergers and acquisitions

A taxonomy of managerial goals in mergers and acquisitions is developed through a cluster analysis of data from interviews with merger and acquisition practitioners. These clusters of objectives overlap with some objectives cited for mergers and acquisitions in the academic literature, but the correspondence is not complete. Further analysis shows that different types of mergers and acquisitions are characterized by different managerial objectives. The implications of this research for the development of a contingency model of the relationship between managerial objectives and mergers and acquisitions are discussed.     

Make your company a talent factory

Despite the great sums of money companies dedicate to talent management systems, many still struggle to fill key positions - limiting their potential for growth in the process. Virtually all the human resource executives in the authors' 2005 survey of 40 companies around the world said that their pipeline of high-potential employees was insufficient to fill strategic management roles. The survey revealed two primary reasons for this. First, the formal procedures for identifying and developing next-generation leaders have fallen out of sync with what companies need to grow or expand into new markets. To save money, for example, some firms have eliminated positions that would expose high-potential employees to a broad range of problems, thus sacrificing future development opportunities that would far outweigh any initial savings from the job cuts. Second, HR executives often have trouble keeping top leaders' attention on talent issues, despite those leaders' vigorous assertions that obtaining and keeping the best people is a major priority. If passion for that objective doesn't start at the top and infuse the culture, say the authors, talent management can easily deteriorate into the management of bureaucratic routines. Yet there are companies that can face the future with confidence. These firms don't just manage talent, they build talent factories. The authors describe the experiences of two such corporations - consumer products icon Procter & Gamble and financial services giant HSBC Group -that figured out how to develop and retain key employees and fill positions quickly to meet evolving business needs. Though each company approached talent management from a different direction, they both maintained a twin focus on functionality (rigorous talent processes that support strategic and cultural objectives) and vitality (management's emotional commitment, which is reflected in daily actions).     

Growth Capital‐Backed IPOs

Growth capital investing is the financing of growing businesses that are investing in tangible assets and the acquisition of other companies. Growth capital is common in retailing, restaurant chains, and health care management, and represents 12% of all venture capital (VC)‐backed initial public offerings (IPOs). Since 1980, investing in growth capital‐backed IPOs has produced mean three‐year style‐adjusted buy‐and‐hold returns of +25.2%, in contrast to style‐adjusted returns of approximately zero for other VC‐backed and buyout‐backed IPOs. One‐third of growth capital‐backed IPOs are rollups and these have produced much higher returns for investors than rollups without a financial sponsor.     

Real options in divestment alternatives

This paper examines the implications of real options theory for both the decision to divest a business unit and the mode of divestment. It is shown that the decision to divest a business unit and the decision to engage in staged modes of divestment are both sensitive to uncertainty, consistent with a real options logic. However, in the face of uncertainty, the results suggest that staged forms of governance create real options that are of lesser value as compared to simply not divesting a business unit and also as compared to completely divesting a business unit. Thus, this study shows that firms have real options of varied value to choose from in the context of divestments. Copyright © 2014 John Wiley & Sons, Ltd.     

Persuasion knowledge and consumer reactions to pricing tactics

The current research investigates consumer knowledge of the pricing tactics that marketers frequently employ and the effects of that knowledge on responses to various price offers. In the research, a series of studies were conducted to develop and validate a knowledge measure designed to assess pricing tactic persuasion knowledge (PTPK). Consistent with the persuasion knowledge model, individuals with higher levels of PTPK were shown to have more knowledge-related thoughts regarding pricing tactic information than those with low levels of PTPK. Additionally, pricing tactic persuasion knowledge was shown to be more predictive of consumer choices regarding quantity surcharge offers and purchase interest evaluations following exposure to tensile claim offers (e.g., “Save up to 50 percent Off”) than several competing constructs.     

Automating Linguistics-Based Cues for Detecting Deception in Text-Based Asynchronous Computer-Mediated Communications

The detection of deception is a promising but challenging task. A systematic discussion of automated Linguistics Based Cues (LBC) to deception has rarely been touched before. The experiment studied the effectiveness of automated LBC in the context of text-based asynchronous computer mediated communication (TA-CMC). Twenty-seven cues either extracted from the prior research or created for this study were clustered into nine linguistics constructs: quantity, diversity, complexity, specificity, expressivity, informality, affect, uncertainty, and nonimmediacy. A test of the selected LBC in a simulated TA-CMC experiment showed that: (1) a systematic analysis of linguistic information could be useful in the detection of deception; (2) some existing LBC were effective as expected, while some others turned out in the opposite direction to the prediction of the prior research; and (3) some newly discovered linguistic constructs and their component LBC were helpful in differentiating deception from truth.     

EXPLAINING PREMIUMS AND DISCOUNTS ON CLOSED-END EQUALITY COUNTRY FUNDS

Over the past decade or so, the surge of interest among U.S. investors in international investing has led to the creation of numerous foreign equity country funds. Like U.S. closed-end mutual funds, the prices of such closed-end country funds fluctuate widely in relation to their underlying net asset values (NAVs).
In this paper, the authors summarize the major findings of their recent study of the performance of 28 country funds relative to their NAVs over the period 1978–1995. While 20 of the 28 funds traded at average discounts to their net asset values, the discounts for the country funds were smaller than those of the average U.S. fund, and over a quarter of the funds sold at premiums.
In an attempt to explain such premiums or discounts, the authors examined primarily three factors: (1) the sensitivity of country-fund returns (relative to that of local market indices) to U.S. returns; (2) the possible effects of local government investment restrictions; and (3) the impact of exchange rate changes. Although most of the eight funds that traded at average premiums represented countries with significant restrictions on capital flows and foreign ownership, there were also a number of funds with similar restrictions trading at significant discounts. In exploring the reasons for such discounts, the authors noted that the returns to the country funds were "surprisingly sensitive" to U.S. market conditions, thus reducing the extent of their diversification benefits for U.S. investors. The article also raises the possibility that if such country funds are not "priced at the margin" by globally diversified investors, U.S investors' "country-risk sentiments" could cause such funds to trade at discounts.     

Goodbye,Good Luck,See Ya Next Week——BusinessWeek talks to Bill Gates as his final day at Microsoft approaches

It's been one of the most carefully orchestrated transitions in corporate his- tory.Microsoft Chairman William H. GatesⅢannounced two years ago he would walk away from his day-to-day duties at the company he co-founded to spend more time working on philan-     

Temporal Orientation and Corporate Social Responsibility: Global Evidence

There has been a growing emphasis on the importance of a long-term perspective in academia and practice. Yet understanding of the interdependency of those factors – the temporal preferences embedded in organizations and in societal values as well as the influence of temporal orientation of investors – remains limited. We theorize whether and how a firm's corporate social responsibility (CSR) is affected by the societal temporal orientation, its time horizon, and its investors' time horizon. Using a global sample, we confirm that CSR activity is higher when a country has a long-term orientation culture, when the firm has a long-time horizon, and when the controlling institutional investor has a long-term investment horizon. We also find that the national culture's long-term orientation heightens the effect of a firm's long-time horizon on its CSR. Further, our results show that the effects of temporal orientation are more pronounced in environmental than in social CSR.