Volume 04 Number 01
An Evaluation Of Leveraged Buyouts In Australia
Kurt Smith and Graeme Robson
No abstract - opening paragraph reads: Leveraged buyouts (LBO) are transactions where private investors use predominately debt financing to purchase a corporation or a division thereof (Palepu, 1990). The investor group usually comprises incumbent management and a leveraged buyout specialist (Easterwood etal 1989).
Sub-Cultural Values And Budget-Related Performance Evaluation: Impact On International Joint Venture Managers
Dennis W Taylor
The use of budgetary emphasis (BE) in the performance of subordinate managers has been extensively researched for its impact on managerial performance (MP) and the creation of budgetary slack (BS), respectively. These two dependent variables are different notions of effectiveness in budget-related behavioural settings and can provide a complementary picture of the consequences of using BE. Thus, greater reliance on BE may improve MP but may also create greater BS. This study examines the relationship between BE and both of these effectiveness outcomes, and does so in relation to a cross-cultural organisational setting. Despite extensive previous research into the effectiveness of BE as a management control device, direct measures of the cultural sensitivity of BE has not been developed. To this end, new concepts and measures of management accounting sub-cultural values are developed and tested in this study. Specifically, two sub-cultural value dimension are established in this study: values held by managers about the exercise of centralised v decentralised authority in budget setting, and values held by managers about methodical v pragmatic procedures in the implementation of set budgets. Contingency theory is invoked in this study to model the "fit" for international joint venture companies between the two sub-cultural value factors and the management control devise of BE. The impact of this "fit" on the effectiveness, as measured by the variables MP and BS, of managers from Hong Kong Chinese and Western sides of Sino-foreign joint venture companies is reported in this study.
The Association Between The Degree Of Centralisation Of Financial Decision Making and Financial Policy Of Multinational Enterprises: Some Empirical Evidence
Dr Vince Hooper
The purpose of this paper is to examine the relationship between centralisation of financial decision making within multinationals and their financial policy. A sample of UK multinationals were surveyed in order to ascertain their degree of centralisation and the importance placed upon various financial policies and strategies. The research findings reveal that firms that have a lower level of centralisation of financial decision-making place different emphasis upon capital structure objectives; tend to follow financial policies which balance the "global vision" of the multinational with "national responsiveness" and stress the usage of local sources of finance for overseas subsidiaries in order to mitigate political risks and capitalise upon market imperfections. The outcome of this paper has policy relevant implications for finance directors who should be aware of the relationship between levels of centralisation and the ability of the multinational to balance its often conflicting objectives.
Minority Shareholders: A Foolish Breed: The Wealth Effects Of Successful Acquisitions On Minority Shareholders
Kevin Campbell and Robin J Limmack
In the current study we test for the presence of a free-rider effect in the UK when minority shareholdings remain following a takeover bid. The study covers the period from 1977 to 1986 and compares the abnorma returns earned by minority shareholders of acquired companies with the abnormal returns earned by target shareholders which were subject to 100% acquisition. We find that minority shareholders obtained lower abnormal returns than target shareholders in 100% acquisitions over the period immediately surrounding the bid, and that they also experienced a significant wealth loss in the 12 month period following the bid outcome. The initial results therefore provide no support for the hypothesis that minority shareholders in the UK free-ride. However, when the minority shareholders were split into three groups on the basis of the size of their minority stake, it was found that minority shareholders with stakes of less than 10%, and stakes falling between 10 and 25%, both suffered significant wealth losses in the 12 months after the bid outcome, whereas the minority shareholders with a stake of between 25 to 50% actually experienced a wealth increase. It would thus appear that the fortunes of minority shareholders are strongly related to the actual size of the minority stake. There is also tentative evidence of a free-rider effect in those acquisitions in which a substantial minority shareholding remained.
Perceived Educational Benefit, Students; Attitudes And Computer Use: An Empirical Study
Vincent K Chong and Theo Christopher
This paper reports the results of an empirical study designed to assess the relationships between students' perceived educational benefit and their attitudes on the levels of computer use. A path model is developed to examine how students' attitudes act as an intervening variable in the linkage between perceived educational benefit and the level of computer use. The results confirm that perceived educational benefit influences the level of computer use, but mainly through the effect it has on attitude. These results are consistent with prior accounting education research indicating that the attitude of accounting students to working with computers is an important factor in affecting their levels of computer use. This study has offered further insights into our understanding of computer use in accounting education. These results should be of interest to accounting educators who are integrating computers into their accounting programmes.