Workforce reductions and post-merger operating performance: The role of corporate governance

Malikov, Kamran; Demirbağ, Mehmet; Kuvandikov, Azimjon; Manson, Stuart

doi:10.1016/j.jbusres.2020.08.042

Cited by 8 publications

(5 citation statements)

References 58 publications

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“…Specifically, acquirers often pay premiums to target firms with the expectation of realizing synergies in the newly formed entity. However, when these premiums are substantial, acquiring firms may lack the necessary resources to effectively execute the integration process and impede the potential synergies (Hitt et al ., 1988; Malikov et al ., 2021). Consequently, post-acquisition performance may suffer.…”

Section: Theoretical Background and Hypothesesmentioning

confidence: 99%

Do takeover premiums hurt post-acquisition performance? – Marketing capabilities matter!

Han,

Sun,

Wen

et al. 2024

MIP

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PurposeThe primary aim of this study is to resolve a longstanding debate concerning the impact of takeover premiums on post-acquisition performance. Specifically, we aim to examine how acquirers' marketing capabilities and payment methods moderate the relationship between takeover premiums and post-acquisition performance.Design/methodology/approachThis study employs linear regression to examine the relationship between acquirers' marketing capabilities, payment methods, takeover premiums and post-acquisition performance in the Chinese manufacturing industry. Data for the analysis were collected from both mergers and acquisition (M&A) announcements and the China Stock Market & Accounting Research Database (CSMAR), covering 1,169 acquisitions from 2012 to 2021.FindingsThe results indicate that acquirers' marketing capabilities moderate the impact of takeover premiums on post-acquisition performance. When acquirers possess strong marketing capabilities, takeover premiums increase post-acquisition performance. Conversely, when acquirers lack strong marketing capabilities, takeover premiums are not significantly related to post-acquisition performance. Additionally, it is noteworthy that takeover premiums show a positive correlation with post-acquisition performance, irrespective of the payment methods employed by acquirers for target firms.Originality/valueGiven that takeover premiums are essential for acquiring resources from target firms, it is crucial to maximize the value of these acquired resources. Our findings suggest that acquirers with weaker marketing capabilities before the deal should consider a more conservative approach to pricing target firms.

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Section: Theoretical Background and Hypothesesmentioning

confidence: 99%

Do takeover premiums hurt post-acquisition performance? – Marketing capabilities matter!

Han,

Sun,

Wen

et al. 2024

MIP

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“…Research on the role of board independence in external change examined mergers (Khorana et al., 2007), acquisitions (Adams et al., 2021; Ben‐Amar et al., 2013; Malikov et al., 2021; Moeller, 2005), and alliances (Post et al., 2015). For instance, board independence does not matter for acquisition likelihood (Peng & Fang, 2010).…”

Section: Board Governance Of Different Strategic Change Typesmentioning

confidence: 99%

Board governance of Strategic Change: An assessment of the literature and avenues for future research

Klarner

Yoshikawa

et al. 2022

Int J Management Reviews

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Boards of directors play a central role in governing corporate strategic change. We systematically review corporate governance research on strategic change published over the past 40 years, differentiating between strategic change types and board characteristics. We identify three developments: a focus on specific strategic change types, board composition and structure, and North American listed firms as a dominant study context. Yet, our analysis of the literature shows that research on board governance of interrelated strategic changes, on different board roles and behaviour, and on the governance of strategic changes across different contexts remains underdeveloped. To address these research gaps, we suggest three future research avenues: (1) examining how boards govern interrelated changes in a strategic change portfolio and its evolution over time; (2) studying the mediating relationship between board governance (particularly different board roles and behaviour), strategic changes, and corresponding outcomes; and (3) gaining a better understanding of the role of context in board governance of interrelated strategic changes. We contribute to corporate governance research by developing a framework that synthesizes extant research on the relationships between different board governance variables and strategic change types, highlights important research gaps, and outlines several future research directions to address these gaps. Our framework and literature overview serve as analytical tools to examine whether boards are well‐designed and prepared to govern multiple and interrelated strategic changes.

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“…As a matter of fact, M&A is one of the most effective solutions to agency problems and to an extent an umbrella that covers the practice of professionalism, prudence, integrity and roots the directors into the treasured virtues that lasts like honesty, responsibility, accountability, transparency, and fairness (KamranMalikov, MehmetDemirbag, AzimjonKuvandikov, & StuartManson, 2021). They concluded that in a M&A strategy, the question is not whether there will be restructuring and redundancy, rightsizing, and downsizing, but whether the layoffs will be efficient to promote performance.…”

Section: Employmentmentioning

confidence: 99%

“…This action deprives the nation of disposable income and exhibits corporates as less considerate to the spirit of corporate social responsibility (Kyrlacopoulos, 2018). In addition, termination of the sales and marketing personnel leads to the disconnection of key customers from the company, thus being a recipe of customer discontent in the new team, an austerity measure that deprives the firm of its valuable customers (KamranMalikov, MehmetDemirbag, AzimjonKuvandikov, & StuartManson, 2021).…”

Section: Employmentmentioning

confidence: 99%

Economic Impact of Mergers and Acquisitions in Corporate World: An African context

Sogomi,

Thuranira,

Kamau

2022

AJOCS

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Mergers and acquisitions have been pronounced and adopted with the profound need to combat the economic crisis and neutralize the detrimental effects of the COVID-19 pan-demic. The uncertainty and risks involved in undertaking business operations have rapidly given rise to the strategic and systematic execution of cost-cutting measures and survival techniques. Mergers and acquisitions are one of the most effective strategies for the survival of a company through the creation of synergies and leveraging on economies of scale. The aim of the study was to establish the economic impacts of mergers and acquisitions in the corporate world. The study specifically sought to analyze and determine the extent to which mergers and acquisitions affect the selected variables constituting market share, share-holders’ wealth, portfolio diversification, employment, and economies of scale. The analysis apparently observed that mergers and acquisitions have no significant impact on share-holders’ wealth in the short run, as indicated by stock price movements, despite commanding an extensive customer base and market share, reduction of operation costs based on economies of scale, and mitigation of financial risks through portfolio diversification. The corporate employees always impede any kind of mergers and acquisitions due to the un-certainties and apprehensions associated with their engagements and organizational culture pitting them against the conventional narrative that change is inevitable.

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Workforce reductions and post-merger operating performance: The role of corporate governance

Cited by 8 publications

References 58 publications

Do takeover premiums hurt post-acquisition performance? – Marketing capabilities matter!

Do takeover premiums hurt post-acquisition performance? – Marketing capabilities matter!

Board governance of Strategic Change: An assessment of the literature and avenues for future research

Economic Impact of Mergers and Acquisitions in Corporate World: An African context

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