Wealth Effects of Acquiring Financially Distressed Firms

The purpose of the present research is to study target and acquirer shareholder wealth effects of acquisition announcements in which the target is financially distressed. The abnormal returns and the dollar abnormal gains to both the target and acquiring firms are examined according to whether the mode of acquisition is a merger or a tender offer. A regression analysis is also undertaken to examine the importance of the mode of acquisition, an industry effect, and tax variables in determining the abnormal dollar gains in acquisitions of financially distressed targets.     

Seven Management Lessons from Microsoft

The software giant Microsoft is a mere corporate stripling. Yet around its formidable success lies an equally indomitable mystique. It is phenomenally successful. Few are bold enough to analyse how and why Bill Gates' and Paul Allen's bright idea turned into the corporate titan of our times. Until now.     

Cash Balance Plans and the Distribution of Pension Wealth

Recent pension plan conversions by numerous large employers have sparked debate about the merits of cash balance plans. This article compares pension wealth in traditional defined benefit (DB) plans and cash balance plans for a national sample of covered Americans aged 51 to 61. The simulations indicate that replacing DB plans with cash balance plans would redistribute pension wealth from those with long-term jobs to those with multiple short-term jobs and from those with substantial pension benefits to those with more limited benefits. Perhaps unexpectedly, women at midlife in 1992 with DB coverage would lose wealth in cash balance plans, but future cohorts of women are likely to fare better.     

Guest Editors' Introduction

abstract   This introductory paper provides a background to the origins, themes and papers of this Special Issue on Micro Strategy and Strategizing. Our overarching argument is that, while the field of strategy has traditionally concentrated on the macro-level of organizations, it needs now to attend to much more micro-level phenomena. We propose an activity-based view of strategy that focuses on the detailed processes and practices which constitute the day-to-day activities of organizational life and which relate to strategic outcomes. The paper develops this view by considering two bodies of theory, those of the resource based view and institutionalism; two bodies of empirical work, those on corporate diversification and structure; and finally the process tradition of strategy research. The paper identifies the benefits of the activity-based view and introduces some challenges for further research. It concludes by introducing the papers in this Special Issue.     

Divergent Identities? Professions, Management and Gender

This article critically examines issues of gender in relation to the 'professionalization' of management, with particular reference to the National Health Service (NHS). It focuses on the Master of Business Administration (MBA) qualification and the role this plays in professional development of managers and clinicians. One MBA course, which has included a number of participants from the NHS and has attempted to include some recognition of gender issues, is used for illustrative purposes. The article raises important concerns about the implications of gender for NHS and other public sector professionals, and draws some conclusions about the ways in which management education might incorporate gender into the curriculum.     

Public interest reports as a medium for corporate disclosure: The case of General Motors

We examined the public interest reports of General Motors from 1971 to 1990 and presented the contents thereof herein. The principal areas disclosed by GM during those years that are discussed in this paper were minorities, women, and employment issues, energy and the environment, international operations, automotive safety, and philanthropic activity. The purpose of this study was to examine the public interest report as a vehicle through which a firm might disclose information in the public interest. We concluded that there were at least three principal forces driving GM's disclosures. They included public attention focused on, potential costs associated with, and the relative subjectivity of an issue.In reading their public interest reports, it became clear that GM is socially responsive in matters of public interest. Whether they are socially responsible is a judgment not within the scope of this study. However, we do not preclude the possibility that the report may serve as a vehicle which would build a certain momentum in public responsibility, and thus partially drive decisions made by management in social issues. David Malone is an Associate Professor of Accounting at the University of Idaho. Dr. Malone's research interests are primarily in corporate social responsibility and public interest accounting. His research has been accepted for publication in journals which include Business & Professional Ethics Journal, Journal of Accounting, Auditing & Finance, Kent/Bently Journal of Accounting and Computers, Journal of Computer Information Systems, Oil and Gas Tax Quarterly, Petroleum Accounting and Financial Management Journal, and Journal of Education for Business. Robin W. Roberts is the union Pacific/Charles B. Handy Professor of Accounting at Iowa State University. Dr. Roberts' research include public sector and public interest accounting and auditing. His research has been accepted for publication in such journals as Accounting, Organizations, & Society, Advances in Accounting, Business & Professional Ethics Journal, Journal of Accounting Research, and Research in Governmental and Nonprofit Accounting.     

A relationship maintenance model: A comparison between managed health care and traditional fee-for-service

This article proposes and tests a model of the patient-physician relationship maintenance process. The model is based on constructs from social exchange theory and Rusbult's investment model. A patient's commitment to their relationship with their physician is conceptualized based on a three-component model of commitment. The three components of commitment (affective, continuance, and obligation commitment) are examined in an interpersonal setting. A general model of the patient-physician relationship maintenance process is first tested. Then the model is tested separately on a traditional fee-for-service subsample and a managed health care subsample (HMO, PPO). The results indicate that the relationship maintenance process is different in the traditional fee-for-service group than the managed health care group. Specifically, affective commitment is more important for traditional fee-for-service patients and satisfaction and continuance commitment are more important for managed health care patients.     

Integrating Credit Models Using Accounting Information With Loan Officers' Decision Processes

This paper focuses on loan officers' cognitive processes of problem detection and problem-hypothesis formulation, which are incorporated into a credit model when they are confronted with loan decisions. Prior credit models in banking have not directly addressed loan officers' internal processes in a loan situation. The integration of both loan officers' cognitive processes and information used in a credit model can better help explain their decision-making biases. The results presented in this paper showed that information derived from a credit model influences loan officers' problem detection and problem-hypothesis formulation, and these processes are important factors in their loan approval. To identify loan officers' decision-making processes, the approach used in this paper integrates principles from financial management, economics, and cognitive psychology with methodological developments from psychometrics and econometrics.     

Influences on consumer use of word-of-mouth recommendation sources

This article reports the development and testing of a theoretical model of the initial stages of recommendation-based decision making by consumers. Although consumers use a variety of recommendation sources, they have different motivations for the use of different sources. The model focuses on the factors that influence the likelihood of consumers using strong-tie sources (e.g., friends and family) and weak-tie sources (e.g., acquaintances or strangers) or recommendations. The factors used in the model are the prior knowledge level of the consumer about the product being considered, the perceived decision task difficulty level, and the type of evaluative cues sought by the consumer. Hypotheses are tested using data collected in an extensive field study with consumers. Two paths or routes of influence on the use of recommendation sources are proposed and confirmed in the study. His work has been published in theJournal of the Academy of Marketing Science, Journal of Marketing, andJournal of Marketing Research. His research interests center on consumer decision making and marketing education. He has published previously in theJournal of the Academy of Marketing Science, Journal of Advertising, Strategic Change, The International Executive, andMarketing Education Review. His research interests include research methodology, quantitative methods, and competitive intelligence. His work has appeared in theJournal of Marketing Research, Journal of Marketing, andJournal of the Academy of Marketing Science. His publications have appeared in numerous journals. His books includeConsumer Behavior (Harcourt Brace Jovanovich, 1986) andMarketing Management (Simon & Schuster).