Excess cash holdings and shareholder value

We examine the determinants of corporate cash holdings in Australia and the impact on shareholder wealth of holding excess cash. Our results show that a trade‐off model best explains the level of a firm’s cash holdings in Australia. We find that ‘transitory’ excess cash firms earn significantly higher risk‐adjusted returns compared to ‘persistent’ excess cash firms, suggesting that the market penalises firms that hoard cash. The marginal value of cash also declines with larger cash balances, and the longer firms hold on to excess cash. The results are consistent with agency costs associated with persistence in excess cash holdings.     

Integrating the critical success factor method into the business process outsourcing decision

This paper outlines a framework that integrates the critical success factor (CSF) method into the outsourcing decision. The framework builds upon the generic outsourcing evaluation methodology and uses the CSF method as a means of evaluating outsourcing at the business process level. The findings from applying the outsourcing framework in a retail bank are presented. The research found the application of the framework delivered positive results in business process outsourcing decisions. As well as linking outsourcing with organisational strategy, it provided a mechanism and language for prioritising which processes require attention through either internal improvement or outsourcing. However, the findings identified a number of challenges with applying the framework including defining processes and understanding complex interdependencies between business processes prior to outsourcing.     

A study of human capital reporting in the United Kingdom

Recently, there have been attempts at increasing human capital (HC) reporting in the United Kingdom (UK) through the introduction of government legislation and other initiatives. This paper assesses the current state of HC reporting in the UK by analysing the annual reports of the Financial Times Stock Exchange 100 companies before and after relevant amendments to the Companies Act 2006. The findings show that most of the companies analysed have been increasing their HC reporting, going beyond their statutory duties and moving away from wider intellectual capital disclosures to focus more on HC issues. However, these changes were not universal.     

A Value-At-Risk Calculation of Required Reserves for Credit Risk in Corporate Lending Portfolios

This paper demonstrates that the building blocks of the insurance process, under similar assumptions, produce identical results to the option-pricing approach in the case of pricing individual loans. We examine the performance of a collective of such building blocks, using portfolio historical performance to endogenously parameterize the default cost function unique to a particular portfolio. Having estimated the appropriate default cost function, we can then specify the reserve requirement for a bank operating such a portfolio. In this respect, the additivity of the Poisson parameter is a powerful feature, allowing one to decompose portfolio performance over time and homogeneous portfolio subsections. Portfolios with greater and lesser risk and profitability respectively are hypothesized, and a capital adequacy framework which equates risk across such portfolios is examined. Finally, we simulate the operation of the proposed capital adequacy model. Observed insolvencies are fewer than those observable under present regulation, and specific problems may be identified earlier than at present.     

Paths of the least resistance: understanding how motives form in international retail joint venturing

Developing the premise that strategies are forged through an ongoing mutual process of developing motives and responses to multiple degrees of resistance, this paper examines the motives underpinning the adoption of joint venture strategies using empirical details from four British retail firms. The findings point to multiple motives forming from multiple paths of resistance in the foreign market, but also among individuals within the firm as well as across the whole international programme. Moreover, this study reveals a paradoxical tension between management's operational impatience to immediately ground the retail format and an overall wariness or gloomy perceptions associated with adopting an international retail joint venture. The paper therefore concludes that the motives and barriers are manifestations of the struggles involved in internationalising retail operations.     

The sources of value destruction in acquisitions by entrenched managers

Prior work has established that entrenched managers make value-decreasing acquisitions. In this study, we determine how they destroy that value. Overall, we find that value destruction by entrenched managers comes from a combination of factors. First, they disproportionately avoid private targets, which have been shown to be generally associated with value creation. Second, when they do buy private targets or public targets with blockholders, they tend not to use all-equity offers, which has the effect of avoiding the transfer of a valuable blockholder to the bidder. We further test whether entrenched managers simply overpay for good targets or choose targets with lower synergies. We find that while they overpay, they also choose low synergy targets in the first place, as shown by combined announcement returns and post-merger operating performance.     

The potential of internet technologies: insights from the public sector

The objective of this paper is to examine the implications of the internet for public sector organisations. Although there are considerable barriers to the full implementation of internet technologies, the findings illustrate that the internet presents public sector organisations with the potential to enhance the ways in which they fulfil the needs of users of their products and services.     

The Impact of Formal and Informal Distance on Gender Equality Approaches: The Case of a British MNC in Saudi Arabia

This study explores the forces that promote and hinder gender equality efforts of a multinational corporation (MNC) operating in the Middle East. Specifically, we draw from a case study to document the formal and informal pressures exerted on a British MNC operating in Saudi Arabia to better understand the multiple forces that influence gender equality approaches in the host country. Our findings suggest that while formal institutions such as the legal requirements and localization policies support gender equality, informal forces that are rooted in the cultural norms and traditions are formidable in hindering such efforts and in reinforcing the status quo. The insights generated from our study have the potential to inform public policy makers and organizational decision makers to locate the right policy tool to promote gender equality. © 2016 Wiley Periodicals, Inc.