Experience Teaches Slowly: Non‐linear Effects of Top Management Teams’ International Experience on Post‐acquisition Performance

Executives’ international experience is commonly considered a critical asset for multinational companies. The underlying presumption is that individuals learn from international experience. We revisit this presumption and propose a conceptualization of learning from international experience that accounts for the process and challenges of such learning. We use this conceptualization to examine how the international experience of top management team (TMT) members affects firm performance following cross-border acquisition decisions of these TMTs. Empirical analyses addressing potential endogeneity concerns show that high, but not low, levels of TMT international experience have a positive impact, and that these effects are moderated by TMT nationality diversity

When Distance is Good: An Upper-Echelons Perspective on the Role of Distance in Internationalization

Prior research has tended to view cross-country distance as an obstacle. Yet, differences across countries are a key reason for firms to internationalize. To address this discrepancy, this paper puts forward a unifying framework which (1) synthesizes and delineates the different types of cross-country distance, (2) provides a logic for analyzing cross-level influences of distance on internationalization decisions, and (3) highlights the opportunities brought about by distance. The paper argues that firms are more likely to be able to realize these opportunities when they have internationally experienced managers and diverse, well functioning top management teams at the helm. The paper also highlights the complex influences of distance, calling for the use of cognitive and behavioral research methodologies to further our understanding of the role of distance in internationalization. An illustrative example of Vodafone Group PLC is included

Quality of meat from young crossbred bulls frozen after 14 days of modified atmosphere storage

The quality of the longissimus lumborum muscle (Holstein-Friesian Black-and-White- HF BW x Belgian Blue - BB bulls) was determined after 14 days of storage under different modified atmospheres (MA) (vacuum; 40% CO2 + 60% N2; 30% CO2 + 70% Ar) and 6 months of frozen storage following 14 days of MA storage. Weight loss and cooking loss were smaller, and drip loss was greater after frozen storage compared with refrigerated storage. The pH of stored meat was typical of high-quality beef. TBARS values increased after refrigerated storage and after frozen storage. The changes in color parameters point to metmyoglobin formation in frozen meat. Both refrigerator and freezer storage had beneficial influence on tenderness, and shear force values decreased in frozen beef. The composition of MA during refrigerated storage had no effect on the analyzed parameters of beef. Frozen meat that was stored in a MA containing Ar prior to freezing was characterized by the lowest weight loss, and vacuum-packaged meat - by the lowest TBARS values

Twice as smart? The importance of managers' formative-years international experience for their international orientation and foreign acquisition decisions

This study examined how top management team's (TMT) international orientation influences perceptions of environmental uncertainty and how these perceptions impact international strategic decisions, in particular regarding ownership stakes taken in foreign acquisitions. We highlighted the need for the concept of TMT international orientation to encompass executives' formative-years' international experiences along with their international career experiences and nationalities. Empirical tests based on a sample of 2122 international acquisitions completed by 561 UK firms over the period 1999–2008 showed that TMT international orientation positively moderated the negative impact of cultural differences and host country risk on acquisition ownership stakes. The results underscored the importance of considering decision-makers' attributes due to their experiences at a young age, beyond their demographic characteristics or professional experience, in the context of international strategic choices. We also discussed some implications of one of the possible consequences of executives' formative international experience, namely biculturalism, for international business.University College DublinEconomic and Social Research Counci

Twice as smart? The importance of managers\u27 formative-years international experience for their international orientation and foreign acquisition decisions

This study examined how top management team\u27s (TMT) international orientation influences perceptions of environmental uncertainty and how these perceptions impact international strategic decisions, in particular regarding ownership stakes taken in foreign acquisitions. We highlighted the need for the concept of TMT international orientation to encompass executives\u27 formative-years\u27 international experiences along with their international career experiences and nationalities. Empirical tests based on a sample of 2122 international acquisitions completed by 561 UK firms over the period 1999–2008 showed that TMT international orientation positively moderated the negative impact of cultural differences and host country risk on acquisition ownership stakes. The results underscored the importance of considering decision-makers\u27 attributes due to their experiences at a young age, beyond their demographic characteristics or professional experience, in the context of international strategic choices. We also discussed some implications of one of the possible consequences of executives\u27 formative international experience, namely biculturalism, for international business.University College DublinEconomic and Social Research Counci

Project suspensions and failures in new product development: Returns for entrepreneurial firms in co-development alliances

Entrepreneurial biotech and large pharmaceutical firms often form alliances to co-develop new products. Yet, new product development (NPD) is fraught with challenges that often result in project suspensions and failures. Considering this, how can firms increase the chances that their co-development alliances will create value? To answer this question, the authors build on insights from signaling theory to argue that prior project suspensions provide positive signals leading to an increase in value creation, while project failures have the opposite effect. In addition, drawing on insights from temporal construal theory, this research predicts that the strength of these effects is contingent on the stage along the exploration-exploitation continuum at which the alliance is formed. The authors undertook event study analyses of 248 alliances formed by 104 biotechnology firms from the United States and Europe listed on eight stock exchanges over an 8-year period between 1996 and 2003. The results confirm that prior NPD project suspensions have a stronger value creation effect (or prior failures have a weaker value destruction effect) in the case of exploration alliances in the upstream of NPD processes than in the case of moderate-scale exploitation alliances in the downstream of NPD. This study is among the first to examine how both prior NPD project suspensions and failures of firms affect the abnormal returns achieved from co-development alliances. This research therefore contributes to the innovation literature by honing a better understanding of setbacks and failures in NPD. Moreover, the findings contribute to the literature on strategic alliances by identifying new conditions under which firms can create or preserve value. This research also contributes to signaling theory by providing evidence of the moderation effect caused by the signaling environment. Finally, this study contributes to the entrepreneurial literature on value creation for entrepreneurial firms in alliances following adverse events

Why TMT international experience and diversity may (not) improve acquisition performance (working paper)

Recognizing the benefits of international competences for firms expanding abroad, prior research advocated the positive role of executives’ international orientation, as reflected in international experience and national diversity of top management teams (TMTs). Yet research into managerial beliefs and biases as well as research into team composition suggests potential negative consequences of TMT international orientation due to overconfidence and inefficient decision-making. Combining these two perspectives, we predicted and tested non-linear effects of TMT international orientation on firm performance following foreign acquisitions. Analyses of 1,697 deals completed by 428 UK companies over a period 1999-2008 revealed that performance benefits may only accrue to the most experienced TMTs and that the benefits from TMT national diversity wane after a relatively low threshold. These findings shed new light on when TMT international orientation may (not) improve foreign acquisition performance, beyond the impact it has on internationalization decisions themselves as documented in prior research.Economic and Social Research CouncilUCD School of Business Seed Fundin

Embracing complexity: Learning from minority, 50-50, and majority joint venture experience

Learning from joint venture (JV) experience is commonly viewed as a way to improve JV performance. However, many JVs are complex and difficult to learn from. How can firms embrace this complexity to realize the learning potential of their JVs? To answer this question we consider how minority, 50-50, and majority JVs differ in terms of complexity stemming from the interdependencies between the JV partners and between the JV and its parent organizations. We theorize that the relatively limited complexity of minority JV experience facilitates learning from more complex experience with majority and 50-50 JVs. However, the same facilitating effect is not expected between two forms of complex experience. We test these predictions on a comprehensive set of equity JVs formed by Dutch listed companies between 1966 and 2005, using JV survival and abnormal stock market returns as complementary JV performance measures

Role of strategic investors in Polish companies: Catalysts for organisational change or opportunists?

The entry of large activist (or so-called 'strategic') investors has become a prevalent phenomenon in transforming economies, such as the Polish one. This paper investigates the relationship between firm performance and the likelihood of a strategic investor entry, as well as the changes firms undergo under control of an activist investor. Theoretical predictions and empirical analyses of 211 Polish companies in the period of 1994–2000 allow us to conclude that strategic investors are more likely to buy stakes in firms of higher labor productivity, and tend to catalyze changes in poorly performing firms. There is also some evidence that investors refrain from committing resources to restructuring the target firms before seizing significant control over them