East Asian corporations: Heroes or villains?
While cross-border acquisitions by emerging economies are increasing over time, a significant percentage of deals are withdrawn before completion. By integrating the ‘organizational learning lens perspective’ with the ‘signalling lens perspective’, this study aims to investigate deal-specific, firm-specific and country-specific factors that can increase the likelihood of deal completion. The analysis is based on 16 years of data from a prominent emerging economy: India, from 2005 to 2021. A binary logistic regression model is used to understand the determinants of deal completion. Additionally, standard event study methodology is deployed for a particular firm-specific determinant (market reaction to deal announcement) to develop a proxy for the variable. Our findings indicate that factors which enhance learning during the acquisition process and communicate strong and positive signals to build trust between the acquirer and target positively impact the completion of announced acquisitions. Specifically, we report that acquisitions using cash as the payment method and those that receive positive market reactions at the time of acquisition announcement exhibit a higher likelihood of completion. In contrast, the prior failure experience of the acquirer has a detrimental impact on the likelihood of deal completion. The empirical results have important implications for improving the success of cross-border deals from emerging nations.
The purpose of this article is to study the influence of internal governance mechanisms on the diversification and growth strategy of Saudi firms in the non-oil sector. Considering a sample of 70 Saudi companies observed over the period 2006-2014 and using the Linear Regression method, correlated panels, corrected standard errors (PCSEs). Our empirical results show the structure of the board of directors that motivates Saudi firms to run less risk and diversify all activities rather than refocus the group's activity. We have shown that the presence of the largest shareholder has a positive effect on the diversification strategy. These results support our basic assumptions that firms with a high concentration of capital favor diversification rather than the risk that accompanies the growth of the firm's overall activities. In line with our reasoning and consistent with previous research, our main contribution is that the control mechanisms are not neutral with regard to the diversification strategy. The verification of these assumptions in the Saudi context makes it possible to enrich the verification of the positive relationship between governance and the diversification of firms.
In November 1999, the founder and chairman of the Daewoo Group, Kim Woo-choong, suddenly found himself without a job. Kim’s departure capped a tumultuous six months in which the head of the then second largest business group in Korea belatedly began to restructure his conglomerate in the spring, only to face a liquidity crisis in July. Ironically, his troubles came just as a robust economic recovery was underway. Unfortunately, it was too late. Kim had displayed the ultimate hubris: Instead of restructuring his over-leveraged, overextended, and far-flung empire after the economic typhoon struck Korea in 1997, Kim went on a buying binge, driving Daewoo Motors and Daewoo’s 36 other subsidiaries into the ground. With roughly $80 billion in debts (the exact figure is still unclear), Daewoo presented Korea with an unprecedented corporate bankruptcy. In fact, no country in the world had witnessed such a large company go bust. The man who once boasted that he had not taken a day off in years— and was too busy to even remember his wife and children’s birthdays— suddenly had plenty time to play with the grandchildren. Kim single-handedly demonstrated that even the top five chaebol were no longer “too big to fail.”
Through its rapid growth during the past decade, family business research has reached its adolescence as a field of study, and family business scholars now regularly contribute interesting and thought-provoking work to top-tier management, entrepreneurship, and finance journals. In this review article, the authors seek to document the growing maturity of family business research and to promote its integration into broader streams of inquiry in the organizational sciences. To do so, the authors describe recent family business research that addresses two fundamental questions: "How do firms differ in terms of their financial performance?" and "How do institutional conditions moderate performance differences between firms?" Based on their review, the authors describe the past and potential future contributions of family business research and conclude that it holds great promise to "give back" and provide meaningful contributions to the general field of management.
Despite having the earliest exposure to electoral democratic practices in the Asia-Pacific region, the Philippines remains to be one of the least stable democracies in the Global South. Notwithstanding the return of electoral democracy in 1986 after two decades of authoritarian rule, the Philippine state has yet to consolidate its democratic regime. In view of the emerging literature on post-1986 Philippine politics, this highlights the defective aspects of its contemporary electoral democracy by examining five key features of state–society relations: (a) the nature of the elite class; (b) electoral and representative politics; (c) civil society; (d) political economy; and (e) internal security. This article focuses on the balance of power across various sectors where interests of the state and non-state spheres interact, and to what extent such dynamics reflect the prospects of a stable electoral democracy. Employing an interpretivist analysis with allusion to some demonstrative empirical examples, this article concentrates on the post-1986 Philippine politics. The main theoretical argument here is that a good starting point for a comprehensive empirical analysis of the quality of democracy requires disaggregating and analyzing empirical observations that demonstrate the nature of the balance of interests found in state–society relations.
This article outlines the implications and recommendations that arise from the findings from a previous empirical research undertaken by the author. In general, the findings suggest that company performance is not a major determinant of top executive compensation. Rather, subjective measures and company size are likely to be the more important determinants of top executive compensation. The findings also suggest that under the condition of ownership concentration, the major role of the board of directors may not be monitoring top executives and setting their compensation. Instead, the major role of the board of directors may be to provide external links, expertise and advice to the company. The findings of the study further suggest that under the condition of ownership concentration, chief executives who hold the chair or vice-chair of the board are unlikely to use their power to benefit themselves. The findings suggest that the assumptions and predictions of agency theory should not be generalised to non–Anglo-American settings such as Hong Kong, and are unlikely to offer an explanation of top executive compensation—at least for the major listed companies in Hong Kong. Other theories such as stewardship theory may offer a better explanation of top executive compensation, especially in a business environment such as Hong Kong. The findings indicate that it may be wise for company shareholders and regulatory policy-makers in Hong Kong to consider Hong Kong’s unique institutional and cultural contexts as they reform compensation policies for Hong Kong’s top executives.
Current issues in international human resource management include global careers that differ from traditional expatriate assignments. A number of foreign executives have in recent years been appointed to positions in the headquarter operations of culturally distant organisations. These appointments of foreign executives in local organisations (FELOs) can be viewed as a specific form of self-initiated expatriation (SIE), with several distinct types of FELOs found in fieldwork studies. This article offers typologies of the individuals and organisations involved in the FELO phenomenon. These typologies elucidate that FELO appointments do not necessarily indicate a geocentric hiring approach, and assist in identifying which FELO workplaces produce successful outcomes as well as those which are likely to fail. The applicability to other country contexts, implications for theory on diversity in management teams, and key criteria for FELO hiring practices are discussed.
We investigate whether busy boards add more value to standalone firms compared to business group affiliated firms in India – an economy plagued with significant institutional voids. Using board composition data of the top 500 Indian firms spanning the period 2003 to 2006, we find that firm performance improves when its board changes from being a board with non-busy outside directors to a board with busy outside directors. Furthermore, directors’ qualifications and experience determine their directorships and degree of busyness. We also find that firms affiliated with business groups exhibit a negative relationship to the number of busy outside directors.
The study compares the effects of structural bases and functional elements of social support on mental health in Taiwan and the United States, using the study conducted in the United States by Lin, Ye, and Ensel (1999) as a reference. Based on a nationally representative sample of Taiwanese adults (n = 2,835), a fundamental similarity in social support structure and function between the two countries was observed. First, the structural bases of social support had a hierarchical order in their effects on depression: Binding (presence of an intimate relationship) was the strongest in reducing depression, whereas belonging (community participation) was the weakest, with bonding (social networks) in between. Regarding the functional elements, perceived social support was a better protector of mental health than actual social support, a finding in line with previous research. On the other hand, several notable differences in the structural bases and functional elements of social support between the two societies were observed, possibly due to the differential cultural and historical characteristics.
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