Massimo Florio, Matteo Ferraris and Daniela Vandone
This paper looks at state-owned enterprises (SOEs) from the angle of the market for corporate control and analyzes in detail the reported rationales of a sample of 355 mergers and…
Abstract
Purpose
This paper looks at state-owned enterprises (SOEs) from the angle of the market for corporate control and analyzes in detail the reported rationales of a sample of 355 mergers and acquisition (M&A) deals performed by SOEs as acquirers over the period 2002-2012. The purpose of this paper, after having created a taxonomy of deal motivations, is to empirically test two alternative hypotheses: deviation vs convergence of M&A deal rationales between state-owned and private enterprises.
Design/methodology/approach
The data set is obtained by combining firm-level information from two sources, Zephyr and Orbis (Bureau Van Dijk). A recursive algorithm is developed to infer the ownership nature of the enterprises at the time the deal took place and then the authors double-checked the identity of the global ultimate owner by visual inspection of all the available information. Motivations are analyzed through a case-by-case analysis and classified into several categories, thereby providing a taxonomy of rationales behind SOE M&As and discussing their differences and similarities relative to private firms.
Findings
More than 60 percent of the deals performed by SOEs as acquirers are driven by “shareholder value maximization” motives, similarly to private enterprise acquirers. The other 40 percent of deals are almost equally spread among three rationales that specifically relate to the role of modern state capitalism in the economy. “Financial distress” motivation, which is the only one clearly deviating from the objectives of profit maximization typical of private ownership, is far less important than the others.
Research limitations/implications
The paper does not analyze the case studies in detail. Neither does it correlate the evidence with the quality of corporate governance or the quality of institutions in the country. This would be interesting in order to discover whether the alignment of objectives between public and private enterprises is enhanced by certain features of public sector management, as suggested by the OECD (2015) Guidelines.
Practical implications
The paper suggests some policy implications in terms of reforms of the corporate governance of the SOEs and accountability of their management against clearly stated public missions. It also calls for the need for citizens to be informed in a transparent way about the rationales of major M&A deals when a SOE is on the acquirer side, and the consistency of such rationales with the mission assigned by governments to the enterprises they own. Finally, it underlines that regulatory concerns raised in many countries by the rise of cross-border SOE M&As are in most of the cases unfounded.
Originality/value
Existing literature has mainly focused on private corporate M&A deals or has just disregarded the ownership status of the acquiring firm. This paper focuses on the motivations for SOE deals in order to elaborate a taxonomy of SOE deal rationales and to identify the differences and similarities between private corporate firms.
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What are the trade-offs between public and private ownership in the business and how does this impact industries responsible for providing and offering services on critical…
Abstract
Purpose
What are the trade-offs between public and private ownership in the business and how does this impact industries responsible for providing and offering services on critical national infrastructure? The privatisation of British Telecom (BT), the UK telecommunications provider that was initially part of the British Post Office, is used to explore this question. By broadening the business perspective beyond the political goals and economic consequences of privatisation; this study aims to approach management history provides new perspectives of the benefits and challenges offered by both public and private ownership.
Design/methodology/approach
To fulfil its purpose, this paper examines how the UK telecommunications incumbent proactively adapted from being an organisation shaped by its unique position within the public sector, to one embracing the challenges offered by the private sector. The analysis is synthesised by linking an understanding of the customer’s requirements, services and technology with surveys of the secondary literature, supported where applicable by archival material, combining perspectives from authors both within the organisation and external to it. Sources include specialist and more general academic material and contemporary and reflective publications from practising engineers and managers; supplemented by material held at the BT Archives and the Guildhall Library in London. It links the debate on ownership to the evolution of the market under study and provides a balanced view across the business, its market, competition and technology.
Findings
The arguments surrounding public or private ownership, are complex, in particular, it is difficult to separate effects due to liberalisation and privatisation. Whilst the former provided the impetus for beneficial change, the latter reduced the level of detrimental entanglement with government policy and enabled the technology and structural changes that took the market forward.
Originality/value
A new and balanced view of the privatisation of BT is taken, with an emphasis on how the company needed to change to thrive in a liberalised market, noting how technological change both required organisational change and enabled it. In contrast to many studies, the emphasis is on what was driving the organisation rather than the policy of privatisation and its effectiveness.
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Looks at the first 100 years of Italian cinema examining its role in Italy’s recent history. Provides a bibliography of major film directors, Italian cinema sources, reference…
Abstract
Looks at the first 100 years of Italian cinema examining its role in Italy’s recent history. Provides a bibliography of major film directors, Italian cinema sources, reference works, histories, themes, theory and criticism and articles in journals.
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Clelia Fiondella and Claudia Zagaria
In this chapter, we address the operationalization of the enterprise risk management (ERM) system in Italy. We first present some Italian economic highlights emphasizing the…
Abstract
In this chapter, we address the operationalization of the enterprise risk management (ERM) system in Italy. We first present some Italian economic highlights emphasizing the uncertainty characterizing the domestic development, and we focus on the recent changes in domestic regulation which are related to the concept of risk. Then, we examine the degree of knowledge of ERM in the academic arena and the role of professional bodies in this field, focusing on if and how ERM principles are embedded within organizations and effectively integrated into their practices. On the basis of the evidence from questionnaires collected from risk professionals working in prominent Italian firms, who are involved in different ways in the ERM process, we provide some concluding considerations about the degree of integration of ERM practices with governance mechanisms, accounting practices and disclosure in annual reports.
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En Xie and K.S. Redding
The purpose of this paper is to introduce the special issue on state-owned enterprises (SOEs) in the contemporary global business scenario. Against the theoretical background of…
Abstract
Purpose
The purpose of this paper is to introduce the special issue on state-owned enterprises (SOEs) in the contemporary global business scenario. Against the theoretical background of and the invited themes for the special issue, the paper presents a summary of key findings and practical implications of the accepted papers and suggests future research directions.
Design/methodology/approach
The paper is conceptual, which organized through utilitarianism or legitimism; SOEs scenario 1 – hungry fox, hunting bears; SOEs scenario 2 – dancing elephant, flying bears; what do we know and what we wish to explore; what have been examined; what we need to study further; closing note by bears’ well-wishers; and protocol of the special issue.
Findings
By deeply looking into emerging economies (China, India), developed economies (Denmark, Italy, Sweden), transition economies (Tunisia) and diverse sectors (public transport, space), coupled with cross-country sample data, the nine accepted papers have discussed several interesting findings and recommended numerous implications for the policymakers and SOEs’ managers. Drawing upon the interdisciplinary literature, empirical and qualitative papers would deepen the understanding of the growth strategies and performance of SOEs, and the application of management theories such as institutional theory, agency theory, social exchange theory, managerial grid theory, incomplete contracts theory and public governance view, among others. The issue also brings a review-cum-citation analysis paper on the impact of privatization on the performance of SOEs.
Originality/value
The papers have made unique contributions to the public economics, new public management, international business and organizational development literature by critically analyzing the burgeoning phenomenon of the changing dynamics and globalization of SOEs.
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Laura Maran and Alan Lowe
This paper reports an investigation of a hybrid ex-state-owned enterprise (ex-SOE) providing ICT (Information and Communication Technology) services in the Italian healthcare…
Abstract
Purpose
This paper reports an investigation of a hybrid ex-state-owned enterprise (ex-SOE) providing ICT (Information and Communication Technology) services in the Italian healthcare sector (in-house provision). The authors aim to offer a framing that reflects the concerns expressed in the interdisciplinary literature on hybrid SOEs from management, public administration and, more recently, accounting.
Design/methodology/approach
This study operationalizes Besharov and Smith’s (2014) theoretical model on multiple logics to analyze institutional structures and organizational outcomes at an ICT in-house provider. It builds on extensive textual analysis of regulatory, archival, survey and interview data.
Findings
The study results show that the combination of hybridity in the form of layering of multiple logics in the health care sector (Polzer et al., 2016) creates problems for the effectiveness of ICT provision. In particular, the hybrid organization the authors study remained stuck in established competing relationships despite a restructure of regional health care governance. The study findings also reflect on the design of organizational control mechanisms when balancing different logics.
Research limitations/implications
The identified case-study accountability practices and performance system add to the debate on hybrid organizations in the case of ex-SOEs and facilitate the understanding and management of hybrids in the public sector. The authors note policymaking implications.
Originality/value
The authors’ operationalization of Besharov and Smith's (2014) model adds clarity to key elements of their model, notably how to identify evidence in order to disentangle notions of centrality and compatibility. By doing this, the authors’ analysis offers potential insights into both managerial design and policy prescription. The authors provide cautionary tales around institutional reorganization regarding the layered synthesis of logics within these organizations.
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The paper aims to explore how companies communicate their heritage by drawing on heritage marketing and corporate communications literature and mapping the corporate heritage…
Abstract
Purpose
The paper aims to explore how companies communicate their heritage by drawing on heritage marketing and corporate communications literature and mapping the corporate heritage communication strategies of iconic Italian brands.
Design/methodology/approach
The study adopts an inductive multiple case study approach, analysing the communication of corporate heritage by nine iconic Italian brands (Pastificio Lucio Garofalo, Barovier & Toso, Pasta Farina, Ducati, Amaro Montenegro, Fiat, Bonomelli, Olivetti and Illy).
Findings
In communicating corporate heritage, companies adopt different strategies that vary along two main dimensions – the subject of the story and the tone of voice of the content. The strategies are: (1) heritage for authenticity; (2) heritage for market leadership; and (3) heritage for continuity.
Practical implications
From a theoretical point of view, the study highlights that heritage marketing strategies vary according to underlying strategic themes and narrative approaches. From a managerial point of view, it offers a preliminary guide for the development of corporate heritage communications, also providing indications for their implementation.
Originality/value
This study is amongst the firsts to investigate the strategic antecedents that can shape corporate heritage communication strategies. It represents an integration of the existing literature, which is limited to the descriptive presentation of heritage marketing principles and tools.