James G. Clawson and Greg Bevan
Whoosh, is that all there is? On the eve of becoming a partner at a well-known consulting firm (“the stuff MBA dreams are made of”), a senior executive starts to question what he…
Abstract
Whoosh, is that all there is? On the eve of becoming a partner at a well-known consulting firm (“the stuff MBA dreams are made of”), a senior executive starts to question what he is doing with his life. Walt Shill had graduated eight years earlier from the Darden Graduate School of Business Administration at the University of Virginia and had worked his way up at McKinsey Consulting to become the first American partner in the Japanese office. Shill and his family move back to the United States, where he starts to question his goals. For the first time, it seems that Shill has no target to aim for. Having had reached his goals, Shill sets out on an adventure to seek his own meaning of life. He gets into good-enough shape to take a cross-country bicycle ride, which he completes. This undisguised case tells Shill's story and what he learned along the way. It ends with Shill's promise to himself to be less judgmental and to start walking through life with eyes wide open. A teaching note is available to registered faculty.
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Keywords
This paper aims to review initial findings of a ten‐year study into instability in executive teams preceding and after mergers.
Abstract
Purpose
This paper aims to review initial findings of a ten‐year study into instability in executive teams preceding and after mergers.
Design/methodology/approach
This briefing is prepared by an independent writer who adds their own impartial comments.
Findings
Consultants and executives involved in mergers and acquisitions (M&A) will be interested in the recently published findings of a ten year study into the close relationship between takeovers and executive churn. Jeffrey A. Krug of Virginia Commonwealth University and Walt Shill of Accenture, VA, have assembled a large volume of data in order to investigate what happens to executives following an acquisition. It makes for unsettling reading for anyone considering an M&A.
Practical implications
The paper gives a warning about likely executive loss to all those considering M&As, and points out possibilities for further study.
Originality/value
The paper presents some key observations from a new database on several thousand companies, leading to some general expectations of the leadership problems that come with M&As.
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Ravi Chanmugam, Walt Shill, David Mann, Kristen Ficery and Bill Pursche
To illustrate the importance of speeded up merger integration process that creates value part of the M&A lifecycle.
Abstract
Purpose
To illustrate the importance of speeded up merger integration process that creates value part of the M&A lifecycle.
Design/methodology/approach
This paper relies on recent case studies, client work and a survey.
Findings
Mergers that create maximum value treat the transaction as a complete lifecycle – beginning with pre‐deal strategy, progressing through deal execution and continuing with post‐merger integration. Most successful merger and acquisition (M&A) transactions are characterized by the superior execution of an explicit value‐capture strategy, which we call the “life‐cycle approach.” To achieve this, top managements in the most successful transactions have relied on four key principles: treat M&A as a holistic process; focus on value creation, not just integration; accelerate merger planning and execution; and use culture as a value‐creation tool.
Practical implications
Companies which already have an in‐built M&A capability, will adopt new best practices in merger integration that treat post‐merger integration earlier in the M&A process.
Originality/value
For companies who have an active M&A growth strategy, a speeded up merger integration allows for the early capture of M&A deal value.
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Jeffrey A. Krug and Walt Shill
The purpose of this paper is to report the results of a ten‐year study on the effects of mergers and acquisitions (M&As) on target company executives and discusses the importance…
Abstract
Purpose
The purpose of this paper is to report the results of a ten‐year study on the effects of mergers and acquisitions (M&As) on target company executives and discusses the importance of managing leadership issues during the merger integration process.
Design/methodology/approach
We followed the careers of more than 23,000 executives in over 1,000 target firms during a 17‐year period surrounding the acquisition. We then compared trends in executive turnover rates before and after the acquisition to understand the long‐term leadership effects of M&As.
Findings
Target company executive teams are generally stable before they are acquired. Following acquisition, however, firms can expect to lose 21 percent or more of their executives each year – more than double that experienced in non‐merged firms – for at least ten years after the acquisition.
Practical implications
Results show that M&As destroy whatever leadership stability target firms may have had prior to acquisition. The problem is to identify leadership instability when it occurs, understand the underlying causes, and take action to restore leadership stability in ways that increase decision making effectiveness and enhance long‐term performance.
Originality/value
In total, roughly ten years were spent compiling the data reported in this study. Given the labor intensity and length of time needed for such an effort, it is highly unlikely that a comparable database will be compiled again in the near future. This creates a unique opportunity to generate deeper insights into a variety of top management team issues in M&As that can be leveraged to improve the effectiveness of post‐merger integration engagements. We expect a variety of insightful findings to emerge as we continue to analyze these data and will report in future articles.
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This paper aims to analyzes merger, firm, and country characteristics that may explain the root causes of long‐term executive instability in target company top management teams.
Abstract
Purpose
This paper aims to analyzes merger, firm, and country characteristics that may explain the root causes of long‐term executive instability in target company top management teams.
Design/methodology/approach
Mergers involve two different groups of executives – executives in place at the time of the acquisition (“incumbents”) and those brought into the target after the acquisition (“new‐hires”). In order to understand why many target companies experience long‐term instability in their top management teams, patterns of turnover in these two distinct groups were analyzed over a 17‐year period in 730 target companies.
Findings
Analysis of the data revealed that a range of factors create conditions in target companies that lead to prolonged leadership instability. Different deal types such as tender offers, hostile takeovers, divestitures, and leveraged buyouts, the nature of merger negotiations, growth and profitability of the target company, headquarters location of the acquirer–whether foreign or domestic, and foreign investment experience of the acquirer all lead to significantly higher turnover rates for both incumbent and new‐hire executives. These effects may continue for ten or more years after the acquisition.
Practical implications
Acquisitions create instability within target company top management teams. This instability can be traced back to conditions that existed at the time of the merger. Organizations involved in mergers and acquisitions (M&As) might leverage these new insights to more effectively deal with leadership issues early in the post‐merger integration process. This may be an important first step in reestablishing long‐term leadership continuity in acquired firms.
Originality/value
This research is the first to provide insight into the root causes of long‐term leadership instability in target companies. It is also the first to examine the effects of M&As on executives who join a company several years after its acquisition. Future research by the author will report on the relationship between leadership stability and long‐term performance in target companies. A deeper understanding of this relationship may provide new insights into why so many M&As fail.
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I. Hoffman and J.S. Koga
Provides a bibliography of CD‐ROM for librarians, covering casestudies, costs, product evaluation guidelines, databases, CDI,downloading/copyright and CD vs. online, for use when…
Abstract
Provides a bibliography of CD‐ROM for librarians, covering case studies, costs, product evaluation guidelines, databases, CDI, downloading/copyright and CD vs. online, for use when making decisions about the adoption of CD‐ROM.
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As the municipal year ends this month, the public librarian will lightly (or otherwise) turn to thoughts of annual reports. Year by year the problem before him is to justify his…
Abstract
As the municipal year ends this month, the public librarian will lightly (or otherwise) turn to thoughts of annual reports. Year by year the problem before him is to justify his ways to men, by producing a document which in the first place is attractive and in the second, third, and as many other places as possible, is true, logical, readable. It is no easy task, especially for those who are new to the experiment or who have made it for so many years that ideas do not come freely ; for, after all, the annual report is a question of ideas. If our minds are of pedestrian, unoriginal—or perhaps infertile is a better word, as originality is as rare as a new planet— type, we shall copy one of the received models, and will be well advised to do so. That is to say, we shall give a brief narrative of what we think are the outstanding events of the year with suitable acknowledgments to committee and staff, and add such statistical tables as will prove the position. These last are always to be summarised in the form prescribed by the Library Association ; the omission of such summary is inexcusable in the modern librarian.
The purpose of this case study is to examine direct investment in commercial real estate from the perspective of the individual. While most research is dominated by studies…
Abstract
Purpose
The purpose of this case study is to examine direct investment in commercial real estate from the perspective of the individual. While most research is dominated by studies concerning direct investment by institutions (REITs, pension funds, etc.), the bulk of direct investment in commercial property is still conducted by individuals.
Design/methodology/approach
The paper presents accounting and financial data from the original purchase, management and disposal of a small‐scale office building. Cash flows, returns and risks are measured and analyzed.
Findings
The case demonstrates that successful direct investments may be characterized by short‐term time horizons involving older, small‐scale properties.
Practical implications
This case illustrates the non‐academic nature of real world direct investment in commercial property. The case demonstrates that emotion and good timing are just as important to a successful venture as are cash flows and thorough risk estimates. The case also shows that successful direct investment in commercial property may be limited to smaller, older properties held for short‐term time horizons.
Originality/value
This case study is unique because it identifies the property, the investor, the purchase price, the operating revenues and the sale price and net proceeds. Most case studies conceal many of these facts in order to preserve anonymity.
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JUNE, the month of blue skies and roses, is for librarians who teach the end of the teaching year and for younger ones the month of examinations. It is for these and others the…
Abstract
JUNE, the month of blue skies and roses, is for librarians who teach the end of the teaching year and for younger ones the month of examinations. It is for these and others the real beginning of outdoor library work where it may exist. Unfortunately a few days of beautiful weather early in May were the only adequate evidences of summer warmth to come, and the north‐east winds persist as we write in Southern England. Those who contemplate the open air roof‐top libraries, library gardens with tables and chairs for reading, Story‐hours in the public parks and so many more hopeful activities find this handicap a persistent one. There are, in the average year, very few days that may be given wholly to sedentary outdoor activities and some librarians, we learn, have abandoned official provision for outdoor reading. Private and personal outdoor reading will always continue; there is nothing more delightful. We doubt, however, if nowadays much serious use is made of books outdoors, although we should welcome evidence to the contrary. We are thinking of the general reader. The light romance, the romantic approach to the outdoor world in the modern equivalents of Richard Jefferies and W. H. Hudson seem more to tune with this part of the year. This, like every general Statement, is subject to many exceptions and the good librarian is alert to every reading possibility of the months. This month sees the annual holidays really begin and with plans for their conclusion in the Annual Meeting of the Library Association in late September at Hastings which we hope will be free from the unpleasant features of the Business Meeting at Llandudno.