276 research outputs found
The impact of communications and emotions on merger and acquisition success: Does anyone care how you feel about your deal?
No full textMost merger and acquisition (M&A) performance studies focus upon protagonist pre-deal characteristics, post-deal post-acquisition integration strategies, or a combination of the two. However, a critical part of the M&A process has been overlooked. The “deal completion” phase, between the announcement of a deal and its completion, can make the difference between success and failure. This paper examines this neglected process by focusing upon managerial practices aiming to influence investor sentiment during the deal completion phase. We contend that skillful use of acquirer voluntary communications can affect acquirer stock market price. This matters, as a higher price for acquirer stock generally improves an acquirer’s ability to purchase a target company and helps a deal to close successfully. We therefore investigate whether acquirers can influence their share price positively through the skillful use of voluntary communications, in terms of both the volume of communications and the sentiment expressed. We suggest that these voluntary communications can reduce information asymmetry between the acquirer and the financial markets, and so influence market prices. We examine 548 large M&A deals between US acquirers and US targets, completed during 2010–2016, and analyze more than 15,000 voluntary communications taking place between announcement and completion dates. Using stock volatility and cumulative abnormal returns, we find that acquirers benefit from more voluntary communications in the short term, particularly in all equity deals. We also find that the sentiment of voluntary communications matters, as those that express negative sentiment in the short term see a reduction in performance, while longer term those expressing positive sentiment see a positive relationship with stock volatility. These results show that managers can use voluntary communications to influence market perceptions of their acquisition strategies, and that sentiment matters
Managing Strategic Issues over Time : Senior Managers' Issue Sustaining Activities
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Scenarios of successful issue sustaining
No full textThis paper’s primary aim is to uncover three scenarios of successful Strategic Issue Sustaining and related activities for senior managers to achieve these. Beyond using abstract categories such as ‘politicking’, I delve into nitty-gritty reality of their practice – for example, controlling meeting agendas and minutes or adapting flight schedules to get CEO time. Building on evidence from 26 issues from five longitudinal case studies, this paper has begun to elucidate the activities particularly associated with successful Strategic Issue Sustaining. Three categories of activity, namely, organizing, boostering, and agenda management are associated with protecting, augmenting and recovering resources. In each case, consistent with the practice perspective, this paper has explored the level of detailed, real activity in order to discover what managers actually do
Cheap talk? Strategy presentations as a form of chief executive officer impression management
Get PDFResearch summary: We develop and test a set of hypotheses on investors' reactions to a specific form of impression management, public presentations of overall strategy by Chief Executive Officers (CEOs). Contrary to expectations from a “cheap talk” perspective, we suggest that such strategy presentations convey valuable information to investors, especially in conditions of heightened information asymmetry associated with varying types of new CEOs. Broad empirical support for our theoretical arguments is shown in a sample of strategy presentations carried out by NYSE and NASDAQ listed organizations over 10 years. Our research contributes to literature on new CEOs and impression management. We draw out implications both for management and for further research. Managerial summary: We examine the impact of public presentations on company strategy by Chief Executive Officers (CEOs) on company stock prices. Adjusting for market movements in general, on average stock prices rose by 1.6 percent following these strategy presentations. Strategy presentations received larger reactions the more the CEO was unfamiliar to investors. Thus, stock price gains for new CEOs in general were 5.3 percent; for external, within‐industry new CEOs, they were 9.3 percent; and for external, outside‐of‐industry new CEOs, they were 12.4 percent. Given that only 40 percent of new CEOs present on strategy in their first 200 days post‐appointment, we suggest that new CEOs pay more attention to this potential means of communicating, especially if they are unfamiliar to investors
Strategic Disclosure: The Content of Strategy Communications
No full textThis chapter considers the impact of companies' external communications about strategy on their reputations. Such strategy communications can take many forms, including material in companies' own annual reports and the media, and the impact may be felt in various ways, including consumer loyalty and managerial rankings such as the Fortune Most Admired list. In this chapter, however, the empirical focus is on the growing phenomenon of companies' own forward-looking communications about their strategies, and reputational impact is considered in terms of consequences in the financial markets. Specifically we address the spread of such strategy communications, abnormal stock returns due to these communications, and the nature of these communications in terms of their language, themes and strategies involved
Just Talk? Strategic Plan Announcements and Market Reactions
No full textThis paper analyses market reactions to public strategic plan announcements by NYSE and NASDAQ companies. Contrary to the low expectations set by 'cheap talk' and 'soft talk'
perspectives, we find that a substantial minority of such strategic plans elicit significant cumulative abnormal returns, either in a positive or a negative direction. We also find that new chief executives are likely to increase the effects of positively-evaluated strategic plans. We
propose that research on strategic planning and performance should discriminate more between the quality of plans rather than whether companies have plans or not. We also suggest avenues for research on the discourse of these strategic plan announcements and on the adoption of strategic plan announcements, from institutionalist and strategy theory perspectives
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