Market reactions to acquisition announcements: The importance of signaling ‘why’ and ‘where’

Acquisitions are risky events but not all acquisitions involve the same levels of risk. We suggest that the announced acquisition motive – the ‘why’ of the acquisition – is an important risk signal. We categorize acquisition motives and distinguish between acquisitions with ‘pure explore’ and ‘pure exploit’ motives. Recognizing that most acquisitions have multiple motives, we identify acquisitions with ‘ambidextrous’ motives – that is different combinations of explorative and exploitative motives – too. Then, building on recent contributions to signaling theory, we argue that the ‘why’ will matter more, if the ‘where’ pertains to a high-risk setting. We measure this using target-to-acquirer industry relatedness. We find that the market reacts more positively to pure acquisitions, aimed at exploration or exploitation, compared to ambidextrous acquisitions. We show that the market reacts more positively to ambidextrous acquisitions orientated towards exploitation than ambidextrous acquisitions orientated toward exploration. Finally, we find that relatedness moderates this relationship, in that the market is more willing to tolerate exploration in a related industry. Our core contribution is to the literatures on acquisition motives and ambidexterity. We provide new insights into the incidence of specific motives, the ways in which they are mixed, and the market's reaction to their announcement. In addition, we contribute to the emerging literature that takes on behavioral perspective of market reactions by showing that the ‘why’ and ‘where’ of an acquisition matter.     

The effects of board size and ‘busy’ directors on the market value of Italian companies

This paper presents evidence that corporate governance quality measured by (1) the board size and (2) the fraction of directors that serve on more corporate boards, influences the market value of firms. The analysis is based in Italy, a country that is characterized by family and concentrated ownership, low legal protection of investors and pyramidal firm structures. Our empirical results suggest that the level of ‘busy-ness’ of corporate directors as a measure of board effectiveness has a significant influence on firm’s market performance. By contrast, we find limited evidence that board size has a substantial impact on the market valuation, except in small and medium enterprises and in some specific industry sectors.

‘Training,it's a load of crap!’: the story of the hairdresser and his ‘Suit’

Many managers of small and medium-sized enterprises (SMEs) are more concerned about survival rather than growth. There are consistent findings that indicate managers in SMEs do not respond favourably to offers of HRD interventions and government policy now recognizes the value of informal learning and demand-led intervention. A social constructionist approach is suggested to consider engaging and working with SME managers. A framework of SME ‘worlds’ is considered before the case of one SME is examined. Using data from three different sources, the various positionings are considered. The case shows how from an apparently antagonistic view of external training, the manager was prepared to allow a coach/mentor to work with him towards his vision for expansion and growth. Conclusions are provided concerning engagement and stretch with SMEs, policy and future funding for HRD and the definition of skills development.     

The impact of lean practices on operational performance – an empirical investigation of Indian process industries

In deciding to adopt lean manufacturing, it is imperative to investigate where and how lean practices are most needed to influence manufacturing and business performance. Such an investigation becomes indispensable when lean thinking is to be considered in a production arrangement different to the conventional, repetitive, high-volume, stable-demand and discrete-manufacturing environment. This study provides explanations of how performance is improved through the adoption of lean practices in process industries. This is a relatively under-researched area compared to the performance effects associated with the introduction and implementation of lean principles in traditional, discrete manufacturing. Based on a survey of Indian process industries, this study attempts to develop an empirical relationship between lean practices and performance improvement through the use of multivariate statistical analysis. The findings have led to the conclusion that lean practices are positively associated with timely deliveries, productivity, first-pass yield, elimination of waste, reduction in inventory, reduction in costs, reduction in defects and improved demand management. However, within a process-industry context, lean practices related to pull production were found to have a marginal impact on performance improvement. A detailed discussion of the findings along with their theoretical and managerial implications is provided in the paper.     

External resource provision and the international performance of SMEs – A contextual analysis

This paper investigates whether different categories of links (core and discretionary) to external resource providers are associated with the international performance of SMEs, as well as the perceived importance of external links for providing specific forms of assistance toward internationalization. A study of 180 internationally active SMEs examines whether these features vary according to the SMEs' contexts, specifically their industry and level of home economy development. The relevance of these two contexts is theoretically informed by resource dependence, environmental munificence and institutional perspectives. SME decision-makers' attribution of importance to discretionary external links predicts stronger international performance, but this is not the case with core market transactional links. Different external parties emerge as important sources of specific forms of assistance toward internationalization. Many of these results are associated with the SME's industry and home economy context. The paper concludes with a new contextually-informed model of SME egocentric networking and implications for practice.     

Measuring the logistics performance of internal hospital supply chains – A literature study

The patient care processes in hospitals are supported by a range of operational activities including inventory management and distribution of supplies to point-of-care locations. Hospitals carry large amounts and a great variety of items, and the issues of storing and distributing these items throughout the hospital supply chain are of great importance to providing high-quality patient service. Healthcare logistics encompasses the process of handling physical goods (e.g. pharmaceuticals, surgical medical products, medical equipment, sterile items, linen, food, etc.) and the associated information flows, from the reception of the goods within a hospital to their delivery at patient care locations. The medical supply costs constitute the second largest expenditure in hospitals, after personnel costs. A high-performing supply chain may realize improved outcomes (e.g. safe and quality patient service) and greater efficiency. Logistics managers need to identify opportunities to improve the logistics processes in order to lower costs and to improve patient care quality. However, in order to improve the logistics processes, you must understand how the healthcare supply chain is currently performing. Measuring the performance of the supply chain is fundamental to identify and address deficiencies in the logistics activities, and it serves as a good input for managerial decision-making. The purpose of this article is to present existing research on performance measurement at the internal hospital supply chain (e.g. inventory management, distribution activities), and more specifically in the operating theatre since it is among the most critical resources for a hospital. At the operating theatre, the requested items should be available at the right time at the right place, in the right condition, at the lowest cost possible. Furthermore, we will also discuss literature on multi-criteria decision-making techniques. It enables researchers to build a performance measurement framework and to prioritize between multiple performance indicators since a diverse group of stakeholders with conflicting interests is involved in the internal operating room supply chain.     

The impact of organisational alignment on the effectiveness of firms’ sustainability strategic performance measurement systems: an empirical analysis

Sustainability is becoming a mainstream issue for many organisations. A limited number of studies exist, however, on integrating sustainability into daily practices. Indeed, most of the research to date addresses only the definition and motivation for companies’ interest in environmental and social concerns. This paper contributes to the research on integrating sustainability into companies’ daily activities both directly and indirectly. It analyses the extent to which top management’s commitment to sustainability directly affects structural and social alignment and the effectiveness of measurement systems that monitor sustainability strategic performance and indirectly impacts firms’ social and environmental performance. Based on a quantitative analysis of survey responses from 405 large European companies, this paper documents the limited impact of social alignment to firms’ social and environmental performance. More specifically, the results challenge the diffuse belief that the alignment and commitment of middle managers to sustainability strategies as defined by the upper echelons have a relevant impact on the company’s social and environmental performance.     

Comment on ‘A political economy of accounting standard setting’

This comment raises questions about the appropriateness of the model proposed by Königsgruber (J Manag Gov 14:277–295, 2010) in depicting the politics of the standard-setting process in the context of the very different regulatory contexts in the EU and the US.     

‘Talking the talk’ – a discursive approach to evaluating management development

Much evaluation practice is guided by a theoretical anachronism. Systematized and formulaic approaches of chain reaction models of evaluation are based on conceptions of management which are over 50 years old. This study presents an evaluation of a management development intervention which used evidence of discursive shift in learners as an indicator of attitudinal and behavioural change brought about by the learning programme. The approach taken characterizes the learning event and the evaluation process as interventions which have the capacity to help learners to shape their identity and in which language is a mediator of learning. The results of the study, which applies both quantitative and qualitative techniques, are used to argue in favour of the deployment of a model of evaluation which has a focus on social and relational aspects of a managers' role.     

The effect of outside directors’ and auditors’ incentives on managers’ ability to manage cash bonuses

This paper investigates the impact of outside directors’ and auditors’ monetary incentives on the association between discretionary accounting and managers’ cash bonuses in a two-tier system. For a sample of German stock corporations from 2005 to 2007 we expect and find that outside directors who receive compensation based on accounting income and auditors who receive high non-audit fees have the incentive to tolerate managers’ bonus-increasing accounting choices. More specifically, we show that positive discretionary accruals are more strongly associated with managers’ cash bonuses than negative discretionary accruals if outside directors receive accounting-based compensation and/or if auditors receive high non-audit fees. Our results suggest that executives’ ability to manage their cash bonuses depends on the monitoring institutions’ monetary incentives.     

‘Slipping through the Net’: The Impact of Incremental Development on the Built Environment of the Historic Coastal Town of Queenscliff in Victoria,Australia

Studies of the impact of development on the built environment often concentrate on areas of sudden change, where new constructions of a radically different scale, purpose or style are clearly seen to dramatically alter existing places. However, change is often more gradual. The cumulative effects of a large number of individual small changes are both extensive and often unrecognized until after they have taken effect, each individual development having ‘slipped through the net’ cast by planning authorities. The problem with this incremental process is that the result is often the erosion of the spatial and experiential qualities previously valued in that locality. As an example, this paper investigates four residential planning case studies in Queenscliff, a small historic coastal town in Victoria, Australia. Through analysis of their individual and cumulative impact on the neighbourhood character of this town, the paper explores the broader implications for the built environment of other Australian coastal towns and highlights the difficulties faced by all planners and residents trying to protect the character of their towns.     

All the bottles in one basket? Evaluating the effect of intra-industry diversification on risk

This paper develops a framework using Monte Carlo simulation to examine risk/return properties of intra-industry product portfolio composition and diversification. We use product-level data covering all Swedish sales of alcoholic beverages to describe the risk profiles of wholesalers and how they are affected by actual and hypothetical changes to product portfolios. Using a large number of counterfactual portfolios we quantify the diversification benefits of different product portfolio compositions. In this market the most important reductions in variability come from focusing on domestic products and from focusing on product categories that have low variability. The number of products also has a large effect in the simulations, moving from a portfolio of 10 products to one of 20 products cuts standard deviation of cash flows in relation to mean cash flows by more than half. The concentration of import origins plays a minor quantitative role on risk/return profiles in this market.     

On the meaning of ‘Waste’: review and definition

Waste reduction is one of the main principles of lean, but it has been taken for granted that we have a common understanding of what waste means. We first present a critical, qualitative discussion that identifies four distinct waste concepts. We then conduct a systematic review of the literature that examines the different uses of these concepts. We find that only the classic concept of the seven wastes and the concept of waste as non-value-adding activity are widely applied. However, both concepts are, at times, not only incompatible but used in a way that leads to open contradiction. A new definition, centred on an efficient, timely transformation process seeks to consolidate the literature. We outline two distinct waste types: (i) obvious waste, to refer to any waste that can be reduced without creating another form of waste; and, (ii) buffer waste, to refer to any waste that cannot be reduced without creating another waste. The paper has important implications for practice. To reduce waste, managers must undertake three interlinked tasks: the elimination of obvious waste; the reduction of variability to transform buffers into obvious waste; and, the balancing of remaining buffers to best achieve performance targets. The paper supports managers in their endeavours to identify waste, which is an important precursor to waste reduction/elimination.     

Perceptions of the effectiveness of training and development of ‘grey-collar’ workers in the People's Republic of China

An important human resource development (HRD) implication of the People's Republic of China's (PRC) rapidly expanding economy has been the emergence of a critical shortage of grey-collar workers (GCW). Although ‘grey-collar’ has been commonly used in the West to describe an aging population within the workforce, in China it refers to people who are neither white nor blue collar workers but technicians. The shortage of GCW constrains the PRC's economic and developmental sustainability, and has been recognized in central and provincial government initiatives to increase training and development of employees within these fields. While acknowledged as a policy and organizational problem, there has been no research investigating what organizations are doing to develop these employees. Drawing upon a survey of 310 semi-skilled and skilled employees in Beijing, our findings suggest that while the surveyed organizations are investing heavily in both on- and off-the-job training, employees' perceived value of such differs markedly according to age and position. The research has important implications for China's HRD strategy in suggesting links between training and other human resource management (HRM) functions are yet to be evidenced.     

Perceived service quality’s effect on patient loyalty through patient attitude within the context of traditional Chinese medicine

Journal of Combinatorial Optimization - Drawing on a sample of 245 patients from a tertiary general hospital in China, we examine the effect of perceived service quality of traditional Chinese...     

Tweaking the entrepreneurial orientation–performance relationship in family firms: the effect of control mechanisms and family-related goals

Management literature is currently giving growing conceptual and empirical attention to the peculiarity and relevance of entrepreneurial attitudes in family firms, with divergent outcomes. Aiming at concretizing the effects of these attitudes, denoted by the entrepreneurial orientation construct, on family business performance and considering that family dynamics come into play in this relationship, we particularly investigate the impact of control mechanisms and family-related goals. Findings are based on a sample of 180 family firms and show that Proactiveness and Autonomy are particularly relevant to financial performance. Agency-problems avoiding control mechanisms moderate the effect of Innovativeness and Autonomy, while socioemotional wealth (SEW) goals moderate the effect of Risk-Taking, respectively. The usage of these mechanisms and managing SEW goals provide opportunities for a more efficient exploitation of entrepreneurial attitudes.