MANAGEMENT OF FOREIGN SUBSIDIARIES FACING UNCERTAINTIES

Ph.DDOCTOR OF PHILOSOPH

How is goodwill associated with acquisition premiums before and after IFRS? - Evidence from U.K. listed acquisitions of control

PURPOSE OF THE STUDY: This master's thesis examines whether the change from local U.K. GAAP to IFRS has any impact on acquisition premiums paid in the U.K. The purpose of the study is to identify critical changes in acquisition accounting and study whether related changes in future reported earnings are likely to impact premiums paid despite zero impact on the intrinsic target firm value. DATA AND METHODOLOGY: The main sample consists of 178 acquisitions of control among firms listed in the U.K. between announcement dates of 1999 and 2012. Deal data is gathered from SDC, financial data from Worldscope and stock data from Datastream. The data is further complemented manually with CEO compensation, board stock holdings and purchase price allocation information from the annual reports of the acquirer for each transaction. The effect of variables related to IFRS is investigated using OLS regression with and without year fixed effects. The Baseline model is built from scratch by combining relevant literature and statistical methods to maximize adjusted r-square. The dependent variable in cross-sectional regressions is acquisition premium. The main hypothesis suggests that goodwill has a negative correlation with the premium paid and that effect is decreased after the adoption of IFRS. In addition the impact of CEO bonuses, managerial discretion in avoiding goodwill write-offs and the recognition of acquired finite life intangibles to acquisition premium is studied. FINDINGS OF THE STUDY: Before IFRS, goodwill variables correlate negatively and significantly with acquisition premiums. Although after the adoption of IFRS this association stays negative it is not significant anymore. Subsample analysis reveals that goodwill variables have significantly negative coefficients under U.K. GAAP only for transactions where CEOs have reported earnings related incentives. Goodwill recognised in business combinations is further significantly and positively correlated with acquisition premium for same transactions under IFRS. Results, however, do not support the view that organisationally complex firms could pay higher premiums after adopting IFRS due to increased managerial discretion in purchase price allocations. Results are relatively robust to an exhaustive number of control variables, alternative model specifications and variable transformations including Inverse Hyperbolic Sine transformations, as well as eliminations of statistically significant outliers

Investigating the Impact of Target Firm Members’ Trust Antecedents on the Perofrmance of Cross-border Acquisition (CBA)

Cross-border acquisitions (CBAs), as organisational entities which are formed and controlled by foreign firms, are one of the most effective methods of expansion available to international firms. Cross-border acquisition is a highly complex and multi-faceted business model which presents several challenges for management. Over the past several years, CBA has become a more frequent target for research in business, and has received significant attention from academia and practitioners alike. The aim of this research is to investigate the factors that impact interorganizational trust and as an outcome, the performance of CBAs in Iraq and the United Arab Emirates (UAE). According Fadol and Sandhu, (2013), Abosag and Lee, (2012), there are few studies that focused on alliances in Middle Eastern countries and more studies on these areas are required. The empirical study is preceded by a review of the existing literature that led to the development of a conceptual framework for this research. The target population samples for this research were collected from four target firm’s employees in Iraq and the UAE, where those firms were identified as having acquired by firms from Western Europe and Asia. The research tool used to collect the necessary data was a survey questionnaire, and the data analysis was undertaken using SPSS and Structural Equation Modelling (SEM). The findings of this study identify that relationship history, inter-firm distance, and integration approach factors have a positive impact on the level of target firm members’ trust; while factors such as collaboration history, complementarity, and autonomy preservation were not found to have a positive and significantly related to the trust. Moreover, Country risk was found to have a negative and significant relationship with the trust. Religion was not found to be positive and significantly related to the trust. Furthermore, positive relationship between trust and performance and between commitment and performance were found. The results of this study offer a framework that identifies the key factors in the development of trust within CBAs and demonstrates that this trust and it’s antecedents have a significant impact on firm performance in Middle Eastern countries such as Iraq and UAE. The findings of this study offer us implications for meaningful managerial practice in selecting cross-border competitors as target firms

An empirical investigation on firm-level performance of cross border mergers and acquisitions

This empirical study investigates the performance of cross border M&A. The first stage is to identify the determinants of making cross border M&A complete. One focus here is to extend the existing empirical evidence in the field of cross border M&A and exploit the likelihood of M&A from a different perspective. Given the determinants of cross border M&A completions, the second stage is to investigate the effects of cross border M&A on post-acquisition firm performance for both targets and acquirers. The thesis exploits a hitherto unused data base, which consists of those firms that are rumoured to be undertaking M&A, and then follow the deal to completion or abandonment. This approach highlights a number of limitations to the previous literature, which relies on statistical methodology to identify potential but non-existent mergers. This thesis changes some conventional understanding for M&A activity. Cross border M&A activity is underpinned by various motives such as synergy, management discipline, and acquisition of complementary resources. Traditionally, it is believed that these motives will boost the international M&A activity and improve firm performance after takeovers. However, this thesis shows that such factors based on these motives as acquirer’s profitability and liquidity and target’s intangible resource actually deter the completion of cross border M&A in the period of 2002-2011. The overall finding suggests that the cross border M&A is the efficiency-seeking activity rather than the resource-seeking activity. Furthermore, compared with firms in takeover rumours, the completion of M&A lowers firm performance. More specifically, the difficulties in transfer of competitive advantages and integration of strategic assets lead to low firm performance in terms of productivity. Besides, firms cannot realise the synergistic effect and managerial disciplinary effect once a cross border M&A is completed, which suggests a low post-acquisition profitability level

The social-psychological processes of supply chain learning: A dyadic perspective

Today’s dynamic and complex supply chain contexts require supply chain actors to continuously learn. Hence, this research explores the fundamentals of effective supply chain learning, which presents in the extant literature as an opaque black box. The study explores the socio-psychological dynamics of learning capability and learning processes of a dyadic supply chain, arguing that they depend on certain enabling characteristics. The study also contributes to a comprehensive theory of supply chain learning by establishing the nature of the linkages between the elements of supply chain learning, thereby bridging the various gaps between micro-and macro-perspectives. By highlighting the significance of the enabling factors, it also theorizes the dynamics of supply chain learning. Also, the relationship between enabling characteristics and the individual, individual-group, group-organizational, and organizational levels of supply chain learning is shown to be strongest when certain contextual factors are present. In analyzing the phenomena, the study uses a constructivist paradigm and an interpretative philosophical base. It also adopts organizational learning theory and a relational view as fundamental theoretical perspectives. A multiple case study methodology is used when collecting the data. This research makes valuable original contributions in the field of supply chain learning. The theoretical contributions extend organizational learning theories to the dyadic supply chain context by developing a more comprehensive and practical perspective of 'supply chain learning' that also demonstrates the crucial role of certain enabling characteristics. This research also develops a framework of the dynamics of supply chain learning at the dyadic level from the perspectives of the supplier and the manufacturing firm. This study will help decision makers to better understand how to manage their supply chain dynamics and enhance their learning processes and capabilities. Using a multilevel lens to study the supply chain learning phenomenon, the framework presented in this study opens the way for understanding the critical role of value creation and behavioral enabling characteristics in supply chain learning. Overall, the study emphasizes the importance of applying behavioral approaches in future explorations of supply chain learning phenomena. However, further theoretical development is required, both to enhance the validity and reliability of the findings and ultimately to provide a successful and sustainable theory of supply chain learning

Pleasure and pedagogic discourse in school mathematics : a case study of a problem-centred pedagogic modality

thesis is concerned with the production of an account of the relation between the reproduction of specialised knowledge and the moral discourse within pedagogic practice. The internal mechanism that knots together knowledge and moral discourse is elaborated by way of an analysis of texts produced by the originators of a pedagogic modality they refer to as the "problem-centred approach." The particular texts analysed are: (1) the Grade 1 to 4 textbooks and the corresponding teacher's guides, and (2) video records, supplied by the originators, of what they consider to be exemplary realisations of the pedagogy in practice of the "approach." The thesis opens with a discussion of a proposition, derived from Bernsteinian studies of curriculum and pedagogy, stating that everyday and academic know ledges are incommensurable, and from which it is claimed that the insistent contemporary attempts at incorporating the everyday into the academic in curricula and pedagogy, under the banner of "relevance," are educationally problematic. Against the Bernsteinian position, a central feature of the "problem-centred approach" is the extensive recruitment of extra-mathematical referents for the purposes of the reproduction of school mathematics. A more general examination of school mathematics texts that recruit the everyday reveal that such texts also associate the everyday with the pleasure of the student, so rendering "relevance," and hence moral discourse, as utilitarian. The manner in which the moral discourse operates within pedagogy was described in terms of Hegel's theory of judgement and Freudian-Lacanian accounts of imaginary and symbolic identification. Hegel enabled a description of pedagogic discourse at the level of the instructional content, and Freud-Lacan at the level of moral discourse. Hegel also enabled the location of the point at which the moral attaches to the instructional. What our analysis revealed is as follows: (1) the "problem-centred approach" is a competence-type pedagogy that employs strategies encouraging an initial imaginary identification with the everyday and pleasure, which is used to effect symbolic identification with school mathematics; (2) moral discourse drives pedagogic judgement by means of the imaginary-symbolic dialectic pertaining to identification; (3) evaluation drives pedagogic judgement aimed at the knowledge statements produced by students; and that (4) while the moral discourse is a pervasive and formally necessary component of pedagogy, it is ultimately embedded in the organisation and elaboration of the instructional contents, working in the service of the reproduction of instructional contents, but in accord with dominant ideological imperatives

Proactively Building Capabilities for the Post-Acquisition Integration of Information Systems

To gain the strategic benefits of acquisitions, firms must successfully execute post-acquisition IS integration. Unfortunately, a key reason acquisitions regularly fail is because firms fail to successfully leverage the post-acquisition IS integration capability. This capability is not found in non-acquisitive firms. Although research has shown that this capability must be built during the years preceding an acquisition, it has not comprehensively explained what the capability is, nor how it is proactively developed. Through an engaged scholarship learning partnership, this PhD examines how Maersk, proactively built their post-acquisition IS integration capability prior to their first acquisition. By adopting the resource-based view and its extension into dynamic capabilities this PhD contributes mid-range theory that describes and explains this proactive capability building process. Firms can leverage this useful knowledge when building their own IS integration capability to become capable of executing post-acquisition IS integration