Do Court Decisions Drive the Federal Trade Commission’s Enforcement Policy on Merger Settlements?

Mergers are generally conglomerate in nature with only minor (if any) horizontal overlaps. Under U.S. law, an enforcement agency may challenge any anticompetitive aspect of the merger and the consequent delay associated with litigation would impose costs on the firm. These costs may give the enforcement agency “leverage” to extract a settlement even when the firm would prevail in court. This paper explores whether the FTC’s decisions to challenge transactions approximate the case law. We find that the representative enforcement regimes of the FTC and the courts are remarkably similar, although the FTC credits efficiencies, while courts consider buyer sophistication as a mitigating factor.     

Simulation-based costing for early phase life cycle cost analysis: Example application to an environmental remediation project

Simulation-based costing (SBC) has been slow to be adopted by the traditional cost estimating community. This can be attributed to many factors, including complexity, how to gather data and develop probabilistic inputs, cost of SBC software, and a lack of understanding of the benefits of developing cost versus risk profiles. This article presents an overview of how SBC can be effectively utilized for early phase life cycle cost (LCC) estimation. A formal process for conducting LCC incorporating SBC is presented not only to provide a structured approach but to also convey to stakeholders how such a study is conducted. This article also presents a case study where total ownership cost versus risk profiles were developed using this proposed process in order to support budgetary and planning considerations for a large environmental remediation project. This research argues that SBC is needed during the concept exploration phase because this is when budgets are often fixed and expectations set.     

Near and dear? The role of location in CSR engagement

Research summary : Building on economic geography and institutional theory, we develop and test theory relating geographic variables to the strength of corporate social responsibility (CSR) engagement and the cost of equity capital. For a large sample of U.S. firms over the period 1998–2009, we find strong and robust evidence that firms located in areas characterized by high levels of local CSR density score higher in CSR engagement. In addition, firms located close to major cities and financial centers exhibit higher CSR engagement compared to firms located in more remote areas. Moreover, the effect of CSR engagement on reducing equity financing costs is even greater for firms in high CSR density areas than for firms in low CSR density areas. Managerial summary : Does the location of CSR engagement by firms affect the strength of CSR engagement by their neighbors? Does the geography of engagement have an impact on financial performance? Our findings show that a firm's CSR engagement increases in areas where there is dense CSR engagement and when it is located near large cities. In these areas, norms, values, and knowledge related to CSR are transmitted to firms through face‐to‐face meetings and frequent social interactions with groups such as peers, labor unions, news media, universities, and community organizations, which tend to be concentrated in large cities. Our findings further highlight that CSR engagement reduces equity financing costs for firms in areas where CSR is widely practiced. Copyright © 2015 John Wiley & Sons, Ltd.     

Nonparametric inference based on conditional moment inequalities

This paper develops methods of inference for nonparametric and semiparametric parameters defined by conditional moment inequalities and/or equalities. The parameters need not be identified. Confidence sets and tests are introduced. The correct uniform asymptotic size of these procedures is established. The false coverage probabilities and power of the CS’s and tests are established for fixed alternatives and some local alternatives. Finite-sample simulation results are given for a nonparametric conditional quantile model with censoring and a nonparametric conditional treatment effect model. The recommended CS/test uses a Cramér–von-Mises-type test statistic and employs a generalized moment selection critical value.     

The impact of employment equity regulations on psychological contracts in South Africa

This article will show the impact of employment equity legislation on the psychological employment contracts of the three main employee groupings in South African society. This study is important in that it fills the gap in the literature that identifies labour market regulations as an important shaping influence on the psychological contract. More than 500 managers from across South African industry and from all ethnic groups were surveyed to identify differences in psychological contracts and attitudes towards the social transformation regulations. We found that the legislation has impacted differentially on the three groupings mainly in terms of their loyalty to stay with their organizations, the focus on their career development in terms of the external labour market and the degree to which they felt they had been affected by the legislation. Additionally we find that the perceived linkage between job satisfaction and labour turnover is significantly weakened by labour market legislation in the case of the beneficiaries of the legislation, but that this may not be the case for those negatively affected by the legislation. The findings have significant implications for the HRM practices of multinationals operating in societies with significant labour market regulatory interventions.     

Motivational bases for managing diversity: A model of leadership commitment

Given the limited effectiveness of equal employment opportunity and affirmative action programs in promoting minorities in the U.S., the onus to advance women and minority groups may depend on the voluntary efforts from corporate America. In this paper, we apply a general theory of commitment to help explain why top executives may be committed to managing diversity in organizations. We propose that top executive commitment can stem from instrumental, normative, or affective bases. Specifically, top executives may be motivated because of utility maximization, a moral obligation, or a personal desire to be associated with a program of social importance and/or to leave a positive legacy. We further explore the implications of the three motivational bases of top executive commitment to managing diversity on firm diversity outcomes, and we offer some propositions which can serve as a basis for future research.     

Behavioural Orientations of Non‐Profit Boards as a Factor in Entrepreneurial Performance: Does Governance Matter?

Relatively little is understood about factors triggering entrepreneurial behaviour within organizations not driven by profit motives. Governance plays an important role in non‐profits, particularly boards of directors. Integrating resource‐based theory and entrepreneurial orientation research, we examine the influence of non‐profit boards as strategic resources shaping the organization's entrepreneurial orientation and performance. In particular, we focus on the non‐profit board's underlying behavioural orientations, or the extent to which the board is strategic, activist, conservative, and cohesive. Findings from a cross‐sectional survey on arts and culture organizations demonstrate that three of these behavioural orientations impact levels of entrepreneurship occurring within non‐profits. Higher levels of entrepreneurship affect social performance, but not financial performance.     

Dominant CEO,Deviant Strategy,and Extreme Performance: The Moderating Role of a Powerful Board

This study examines the effect of dominant CEOs – defined as CEOs who are very powerful relative to other executives in their top management teams – on firm strategy and performance. Based on a sample of 51 publicly traded, single‐business firms from the US computer industry for the period 1997–2003, our results suggest that firms with dominant CEOs tend to have a strategy deviant from the industry central tendency and thus extreme performance – either big wins or big losses. Further, powerful boards weaken the tendency of dominant CEOs towards extremeness and, more important, improve the likelihood of dominant CEOs having big wins versus big losses. This study reconciles the pessimistic and heroic views regarding dominant CEOs, and suggests that the notion of power balance should be considered in a broader context.