Signaling strategic commitment for organizational transition: how to manage potential M&As through voluntary disclosures

To ‘transit or not’ often depends upon winning over investor opinion to large strategic initiatives. M&A is one such major realignment of an organization and yet once a bid for a company has been announced there is a period of uncertainty when the bid may not be completed. This depends on share price movements determined more by investor perceptions than fundamental values. This paper investigates whether these perceptions may be influenced by ‘voluntary’ corporate communications and so link managerial practices to strategic outcomes. Drawing upon two very large M&A data sets (USA and UK) (57,000 deals; 30,000 communications) we argue managerial practice (signaling strategic commitment) shapes market response and demonstrate communication characteristics, and the use of high-reputation intermediaries, play an important role in determining share price reaction

Voluntary disclosures as a form of impression management to reduce evaluative uncertainty during M&A

This study develops and tests a set of hypotheses on how to manage investors’ evaluative uncertainty during M&A through a specific form of impression management, namely, interim news events. We suggest that voluntary disclosures are key in influencing investors’ reactions during M&A. Empirical support for our theoretical arguments is shown in a sample of 36,376 deals and 163,023 associated interim news events carried out by NYSE and NSDQ listed organizations over 10 years. Our research contributes to literature on voluntary disclosures, impression management, and managing M&A

A bitter pill? Institutional corruption and the challenge of antibribery compliance in the pharmaceutical sector

We investigate why top-down directives aimed at eradicating corruption are ineffective at altering on-the-ground practices for organizations that have adopted industry-wide “gold standards” to prevent bribery and corruption. Using interview and focus group data collected from leading multinational pharmaceutical firms, we unearth antecedents contributing to organizations’ systemic failure to embed their anticorruption policies in business practice. We identify two tensions that contribute to this disconnect: a culture clash between global and local norms, especially in emerging markets and a similar disconnect between the compliance and commercial functions. To overcome these tensions, we suggest that organizations are likely to find it easier to implement a no gifts policy if they cease to rely on local agents embedded in local norms and that there needs to be strong evidence of board-level commitment to antibribery programs, innovative ways of incentivizing compliant behavior, and a fundamental rethinking of organizations’ business model and remuneration practices

Scenarios of successful issue sustaining

This paper’s primary aim is to uncover three scenarios of successful Strategic Issue Sustaining and related activities for senior managers to achieve these. Beyond using abstract categories such as ‘politicking’, I delve into nitty-gritty reality of their practice – for example, controlling meeting agendas and minutes or adapting flight schedules to get CEO time. Building on evidence from 26 issues from five longitudinal case studies, this paper has begun to elucidate the activities particularly associated with successful Strategic Issue Sustaining. Three categories of activity, namely, organizing, boostering, and agenda management are associated with protecting, augmenting and recovering resources. In each case, consistent with the practice perspective, this paper has explored the level of detailed, real activity in order to discover what managers actually do

Corporate communication and reputation: an in-depth analysis into impact, practices, and reputational aspects tied to M&A announcements

The objective of the research is to observe share price reactions to information announcements during M&A processes. We shall focus upon the London Stock Market as this is the second most active M&A market in the world and a market in which one of the researchers has a great deal of direct experience. In doing so, we propose to uncover i) what types of information make a difference to share prices, ii) the importance of the timing of this information release, and iii) whether there are firm specific and group reputational effects which lend information more or less credibility. This research will provide corporate practitioners with empirical evidence regarding the impact of different corporate communication practices in terms of their content and timing. The research will also be able to answer the extent to which aspects of prior reputation gives weight and credibility to communications, and whether this is a generic quality or more specific to the information being provided, for instance whether being a well run company is sufficient to add credibility or whether specific experience in the issue at hand makes the difference. Finally, with regards to outcomes directed at High Status Reputation Intermediaries, the research will provide insights into whether or not, and to what extent, the involvement of professional advisors makes an impact in lending their reputations to enhance the effectiveness of company messages being communicated to the markets

The Communication Advantage: Investigating Impacts of Interim News Events

For investors the M&A process is characterised by evaluative uncertainty – where there is an absence of clear indicators of how protagonist firms may perform. This may have negative consequences for those firms’ abilities to enact intended strategies. It is widely reported that the financial media provides information that affects share prices, but there are few studies that examine how firms actively manage their communications in order to achieve their strategic ends. This study focuses on how organizations manage investment analysts’ evaluative uncertainty during M&A through a specific form of impression management, namely, interim news events. We focus on investment analysts as legitimate third-party evaluators of organizations, and providers of certification as to a firm’s ability (or lack of ability) to pursue strategic decisions such as M&A. In a dataset comprising of a sample of 36,376 deals and 163,023 associated interim news events over a ten year period, we suggest that voluntary disclosures are key in managing analysts’ evaluative uncertainty during M&A. Our research contributes to literature on M&A, voluntary disclosures, evaluative uncertainty and impression management

Communicating strategic commitment during takeovers

Stock prices are influenced more by investor perceptions than fundamental values (Fombrun 1990, 1996). These perceptions may be influenced by ‘voluntary’ corporate communications, but it is not clear which elements of these communications have greater or lesser influence on share prices. This paper investigates the effect of voluntary communications at a time of strategic uncertainty – the post announcement phase in a proposed merger. Post announcement, the outcome of the M&A is not evident, and in this period of information asymmetry between protagonist companies and investors, corporate communications are likely to influence share prices. This effect may also be different in different regions of the world. Drawing upon two large M&A data sets for the USA and UK comprising of nearly 57,000 deals and nearly 30,000 voluntary external communications, this paper argues that signalling strategic commitment is important in shaping market response. Our results demonstrate that communication characteristics such as volume of communication, content-related factors such as sharing information regarding integration plans, a mix of qualitative and financial data, plans on how to establish synergies and undertake investment as well as employing high- reputation intermediaries plays an important role in determining share price reaction