Integration managers: special leaders for special times

Although the integration of an acquired company with the parent organization is a delicate and complicated process, traditionally no one has ever been responsible for that process--for charting how the two companies will combine their operations, for seeing to it that the integration project meets its deadlines and performance targets, and for educating the new people about the parent company and vice versa. Some enlightened companies have recognized this gap and have appointed a guide--the integration manager--to shepherd everyone through the rocky territory that two organizations must cross before they can function effectively together. The authors have interviewed a number of these leaders in depth, as well as some of the people with whom they've worked. They've determined that integration managers help the merger process in four principal ways: they speed it up, create a structure for it, forge social connections between the two organizations, and help engineer short-term successes. In this article, the authors detail five acquisitions--at TI, General Cable, Meritor Automotive, Lucent, and Johnson & Johnson--and discuss the role that integration managers played in each. They describe exactly what sort of person should do this job. The integration manager must be able to jump into complex situations quickly, relate to many levels of authority smoothly, and bridge gaps in culture and perception. The ever-changing organizations of the Internet age will need leaders with similar skills. In fact, the authors contend, the integration manager should be considered a prototype for the leader of the future.     

Getting the attention you need

Employees have an enormous amount of business information at their fingertips--more specifically, at their desktops. The floodgates are open; profitable possibilities abound. But having to handle all that information has pushed downsized staffs to the brink of an acute attention deficit disorder. To achieve corporate goals, business leaders need their employees' full attention--and that attention is in short supply. Authors Thomas Davenport and John Beck have studied how companies manage the attention of their employees and their site visitors. In this article, they analyze the components of attention management through three lenses--economic, psychobiological, and technological--and offer guidelines for keeping employees focused on crucial corporate tasks. Their lessons are drawn from the best practices employed by today's stickiest Web sites and by traditional attention industries such as advertising, film, and television. The authors say executives must manage attention knowing that it's a zero-sum game (there's only so much to go around). Managers should also consider capitalizing on the basic survival and competitive instincts we all have that help determine how much attention we pay to certain things. For instance, the threat of corporate demise--and the consequent loss of jobs and livelihoods--undoubtedly focuses workers' attention on the need to change. Likewise, internal competition among business units may give employees added incentive to pay attention to a profit or sales goal. Leaders today need to pay more attention to attention because it's widely misunderstood and widely mismanaged, the authors conclude.     

Health benefits: employer liability and the need for change

The cost of health care benefits has been rising much faster than overall inflation recently, and employees are increasingly dissatisfied with the programs being offered. This has left many human resources professionals searching for a better way. Against this background, attempts to increase employer liability pose serious threats. While some employers might consider abandoning health benefits to avoid this expanded liability, other alternatives may be more appealing and may be equally effective at limiting liability.     

Exclusions of infertility treatment in the aftermath of Bragdon v. Abbott

This article analyzes the Supreme Court's decision in Bragdon v. Abbott to determine whether the Court's reading of ADA necessarily leads to the conclusion that a group health plan's or insurer's exclusion or limitation of coverage with respect to infertility is prohibited by ADA. The authors conclude that it may be advisable for plans to perform at least minimal actuarial calculations with respect to the current or anticipated costs of covering infertility treatments prior to adopting any exclusions or limitations of coverage.     

Qualified medical child support orders--California health insurance coverage assignment orders--national medical support notices: what's a plan administrator to do?

Many employer-sponsored health plans and multi-employer health benefit trusts have seen an increase in medical child support orders (MCSOs), and they can anticipate receiving a greater number in the future. Once regulations are final for the national medical support notice (NMSN) required by the Child Support Performance and Incentive Act of 1998, plans should also begin receiving these. In preparation, plan administrators should ensure that they have proper procedures in place for determining whether MCSOs and NMSNs constitute QMCSOs.     

Outcomes from use of an evidence-based practice guideline

The aim of evidence-based guidelines is primarily to improve patient outcomes without adding to the existing cost of care because both payers and policymakers want to identify health care costs that do not result in benefit to the patient. The purpose of the reported project was to generate a practice guideline for the treatment of uncomplicated acute cystitis in a female population, to determine the extent to which the guideline would be used by providers and to measure the cost and quality of outcomes from its use. A retrospective chart review was used to gather pre-guideline practice and cost data. Measurements included the type, frequency, and duration of antibiotic therapy and the use of urine cultures and both complications and routine followup visits. The implementation of an outpatient practice guideline resulted in a significant change in antibiotic prescribing and a trend toward a change in ordering cultures and clinic followup. There was also a significant decrease in treatment costs.     

Executive Financial Incentives and Payout Policy: Firm Responses to the 2003 Dividend Tax Cut

We test whether executive stock ownership affects firm payouts using the 2003 dividend tax cut to identify an exogenous change in the after‐tax value of dividends. We find that executives with higher ownership were more likely to increase dividends after the tax cut in 2003, whereas no relation is found in periods when the dividend tax rate was higher. Relative to previous years, firms that initiated dividends in 2003 were more likely to reduce repurchases. The stock price reaction to the tax cut suggests that the substitution of dividends for repurchases may have been anticipated, consistent with agency conflicts.     

Charter Value, Risk-Taking Incentives, and Emerging Competition for Fannie Mae and Freddie Mac

This paper examines two forces that may soon increase competition in the U.S. secondary conforming mortgage market: (1) the Federal Home Loan Bank mortgage purchase programs, and (2) the adoption of revised risk-based capital requirements for large U.S. banks (Basel II). We argue that this competition is likely to reduce the growth and relative importance of Fannie Mae and Freddie Mac and hence reduce their charter values and effective capital. Such developments could, in turn, lead to more risky behaviors by these two companies. This last consequence warrants greater supervisory awareness and legal authorities.     

The value relevance of top executive departures: Evidence from the Netherlands

On theoretical grounds, monitoring of top executives by the (supervisory) board is expected to be value relevant. The empirical evidence is ambiguous and we analyze three non-competing explanations for this ambiguity: (i) The positive effect on firm value of board monitoring is hidden in stock price effects due to the simultaneous occurrence of the positive real effect of monitoring and the opposing information effect. (ii) The combination of board monitoring and monitoring by other parties prevents assessing the value relevance of board monitoring in isolation. (iii) The confounding effect of a simultaneous successor appointment typically generates an upward biased estimate. Based on an analysis of price effects and trading volumes at announcement, we conclude that monitoring by the supervisory board is valued by investors: Forced departures of executive directors, also without a successor appointment, are value relevant in the Netherlands where external control mechanisms and shareholder control were virtually absent in the period studied (1991–2000).