Form of control: a critical determinant of acquisition performance and CEO rewards

Article Abstract:

A study is conducted to determine whether shareholder interests or CEO interests influence decisions to make acquisitions. The following hypotheses are tested: that increases in managerial rewards will be associated with increased firms size due to an acquisition in manager-controlled firms and in owner-manager controlled firms, but associated with positive excess returns accruing to shareholders in owner-controlled firms. It is also hypothesized that announced acquisitions will be associated with positive excess returns accruing to shareholders in owner-controlled firms and in owner-manager-controlled firms, but associated with negative excess returns in manager-controlled firms. The results are discussed.

Acquisitions and mergers, Stockholders, Chief executive officers

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Agency conflict and corporate strategy: the effect of divestment on corporate value

Article Abstract:

Investor Responsibility Research Center's divestment data from 1984 to 1990 have been examined to determine the impact of corporate divestment announcements on the stock return behavior of publicly traded firms in South Africa. Results suggest that stock prices react negatively to announcements of divestment of South African business units. This shows that corporate divestments in South Africa are perceived as economically costly and associated with agency conflicts. In addition, the findings provide evidence that senior managers of businesses in South Africa do not decide for divestment because of capital market signals or the threat of hostile takeovers but are motivated by their self-interests.

Divestiture Analysis, Management, South Africa, Securities, Executives, Corporate divestiture, Divestiture

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A refinement of Porter's strategies

Article Abstract:

Michael Porter lists and defines three generic strategies: cost leadership, differentiation, and focus strategies. It is suggested here that several refinements to Porter's ideas could enhance their worth to both practitioners and academicians.

Product differentiation, Strategic planning (Business), Porter, Michael

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