Dynamic due diligence : an entrepreneurial business planning method for evaluating mergers and acquisitions: theory, case application and general implications

This paper presents a method for conducting dynamic due diligence to evaluate Mergers and Acquisitions; demonstrates its effectiveness in a particular case; and extrapolates its theoretical and practical implications to the general case. It may be called the ‘ECIPP’ method - an acronym for: Establishing mandates; Creating projections; Identifying issues; Prioritizing procedures and Performing them.

Two established alternative due diligence methods are examined. The prevailing finance-theory-based procedure has the virtues of simplicity and elegance; the vice is abstraction. The prevailing practitioner-based regime has the virtues of thoroughness and concreteness but the vices of rigidity and inefficiency. Resolving the tradeoffs inherent in both static prescriptions provides an opportunity for a dynamic, innovative approach derived from grounded theory and an application of Hindle’s (1993) theory of venture renaissance through application of an enhanced paradigm of Entrepreneurial Business Planning. The ECIPP method retains simplicity, concreteness and thoroughness but eliminates abstraction, rigidity and inefficiency.

This is demonstrated in a case. ChildCo’s CEO had only one month to complete his M&A evaluation; no expertise or previous experience; severely limited budget for the exercise and had been flatly informed by prevailing M&A experts that what he wanted could not be done. Using the ECIPP method, the CEO and the author did it: on time, within budget and to the satisfaction of a previously skeptical board of one of the world’s largest multi-national companies including arguably the world’s most professional corporate M&A division.

The replicability logic of the case research permits two generalisations. (1) ECIPP extends the range and utility of Entrepreneurial Business Planning as a management technology, well beyond the constraints to which it is usually confined. (2) The ECIPP method of dynamic due diligence is an innovation worthy of mature consideration and further investigation by theorists and practitioners in the M&A field, in the disciplines of both Finance and Entrepreneurship and, well beyond, in the realms of general management theory, methodology and practice.

Are workers with a disability less productive or less understood? An empirical investigation from an entrepreneurial business planning perspective

This study investigated selected work-performance data of a large call centre using the entrepreneurial business planning paradigm as a theoretical framework and tested the hypothesis that levels of productivity would be different for each group between workers with a disability and workers without a disability. On five measures of productivity, no significant differences were discernible but on a sixth measure, length of employment, it was found that disability workers remained in employment significantly longer. These results strongly refute the ‘intuitive wisdom’ that workers with a disability are less productive. The results support a growing body of corporate experience and descriptive research indicating that workers with a disability perform as well as or better than their non-disability colleagues. Yet workers with a disability remain disproportionately under-employed. The key to translating the growing evidence of this research into higher levels of employment of workers with disabilities will depend upon employers adopting an entrepreneurial approach to the planning of human resource management.

Sweet talking to ethnic customers : a field experiment on the links between entrepreneurial business planning, cultural sensitivity and sales growth

The purpose of this study was to test whether calculated inclusion of cultural sensitivity in a selected entrepreneurial business planning (EBP) process could increase sales growth in a test market and to explore the implications of a positive answer for the theory and practice of entrepreneurial business planning. Execution of a pretest-posttest control group experimental design measured and compared the implemented effectiveness of a planned entrepreneurial initiative based on cultural sensitivity. Though small in scale and limited in focus, the initiative qualified as an example of entrepreneurial business planning (EBP) and could be used to apply, test and extend aspects of the developing theory in this field of entrepreneurship research. Since the initiative was planned to overcome a culturally-defined impediment to business growth, it also offered opportunity to explore the specific importance of cultural variables in the context of EBP.

A planned sales-promotion was offered to a control group (receiving information in English) and a treatment group (who received the information in the language of ethnic origin). The sixty subjects had been chosen at random from a population of route-trade retailers of defined ethnic origins (Greek, Lebanese and Chinese) and randomly assigned to control and treatment groups. Monthly sales averages of the promoted product were measured before and after treatment. A Chi Square test was used to evaluate the relative proportion of the control and treatment groups who accepted the promotional offer. A two sample t-test procedure and complementary non-parametric Mann-Whitney test were performed to compare the mean sales-performance change of the two groups. Analysis showed that there was a significant increase in mean sales when the planned entrepreneurial initiative was communicated in the relevant language of origin.

The experimental results have specific practical relevance to revitalising the deteriorating route-trade segment of the Australian confectionery market through increasing the sales growth of wholesalers who are prepared to act entrepreneurially and include cultural sensitivity as an element in planning and implementation. By introducing cultural sensitivity as a necessary extension of a plan’s communications role, the results also have general theoretical implications for the developing paradigm of entrepreneurial business planning.

Small firm e-business adoption : a critical analysis of theory

Purpose – The paper critiques a range of theories and evaluates their ability to provide a lens for explaining the idiosyncratic nature of small firms and their e-business adoption decisions.

Design/methodology/approach – This literature review firstly summarises the existing research evidence that shows that small firms are idiosyncratic when it comes to e-business adoption. It then critiques theories commonly used in the literature in this field to examine the extent to which they take this small firm idiosyncrasy into account when explaining e-business adoption decisions.

Findings – The critical analysis shows that no commonly-used theory adequately explains small firm adoption of e-business because each omits important aspects of small firm idiosyncrasy. The analysis suggests that an integrated theoretical framework is needed. Preliminary ideas on this framework are provided.

Originality/value – Existing research generally applies a small number of selected theories and formulates research models of adoption factors. However, there is no systematic analysis of theories in this field and no consensus about theoretical frameworks. This paper addresses this limitation of the literature by critically evaluating the commonly used theories in terms of their individual suitability as lenses for explaining small firm e-business adoption.

Staff perceptions of the implementation of enterprise resource planning systems in three Australian universities

This chapter reports a study that examined the staff perceptions of the implementation of an Enterprise Resource Planning system (ERPs) in three Australian universities. The literature on issues impacting on effective Enterprise Resource Planning (ERP) implementations identified a number of issues that translate from the corporate sector to the higher education sector and included a number that require particular focus in this sector. Case study methodology is used to examine the staff perceptions of the management of ERP implementations in three Australian universities in the process of implementing ERP systems. The study was conducted in two phases. The first phase of the study obtained data through a series of focus groups at one university and, combined with an analysis of the relevant literature served as a framework for the development of the research process in the second phase of the study. This phase involved in depth interviews with staff that enabled the researcher to undertake a more detailed exploration of the staff perceptions of influences affecting ERP system implementations at three Australian universities. This chapter reports that staff perceptions of the process of ERP implementations are central to their efficacious implementations in Australian universities. Staff perceptions demonstrate that particular consideration of organisational influences related to their context and the perceptions of the users of the systems must be factored into the planning for ERP implementations in Universities.

Planning practices in Australian family businesses

Australian family businesses have a poor track record of undertaking formal business planning. This paper reports on the business planning behaviour of
Australian family businesses from a survey of 5,000 businesses across all types and sizes of industries. Our survey found that around one-third of family
businesses undertake formal planning activities. Thus, there has been no improvement in family business planning practices from that reported in 2003. The reluctance of Australian family businesses to undertake contingency and risk planning, as well as human resources planning, leaves Australian family businesses highly exposed in these difficult economic times.

How to write an unsuccessful entrepreneurial business plan : content analysis of the normative literature reveals a flawed paradigm

The study's aim was to investigate whether an Entrepreneurial Business Planning (EBP) paradigm could be discovered as a body of core, common maxims within the normative EBP literature (works of the 'how-to-write-a-successful-new-venture-business-plan' genre). It employed content analysis techniques adapted mainly from the methodological prescriptions of Krippendorf (1980) and Carney (1972). The textual investigation produced a comprehensive, quantitative data base capable of sufficient interpretative richness to discover that an established Entrepreneurial Business Planning paradigm does exist. Its major elements embrace two key assumptions, four strong mandates and four weaker mandates.

The discovery is significant for two main reasons. First, it provides a formally-researched, explicitly-articulated EBP paradigm. This can replace the anecdotal, unarticulated assumption (implicit in most of the normative EBP literature) that an EBP paradigm 'probably exists'. Second, the research redresses some of the imbalance between entrepreneurship teaching- where Entrepreneurial Business Planning is at the core of international curricula - and entrepreneurship research which has virtually ignored EBP as a topic worthy of serious scrutiny. A firm basis for critical, scholarly exploration of the neglected EBP field is now established. This takes the theory and practice of EBP into a new era beginning with recognition that the discovered EBP paradigm is badly flawed and likely, if blindly applied, to lead to the writing of unsuccessful business plans.

Using business intelligence to support the process of organizational sensemaking

Making sense of an organization overwhelmed with data becomes a problem for decision makers at all levels of business planning and operation. Although scholars have suggested several technological solutions such as business intelligence as being useful in helping busy executives to make decisions, we still know little about assisting business stakeholders in the process of understanding their organizational complexity before such decisions could even be formulated. In this paper, we investigate the opportunities in using BI technologies to make sense of a business environment. We analyze the views and opinions of developers, analysts, consultants, and users of business intelligence, who are experienced in using the technology beyond decision making to support organizational sensemaking. Our results highlight the need for creating and maintaining individual; and organizational identity and enacting this identity on the business and its environment.

Program assessment and reporting: linking people, processes and data

As part of a larger Simplification Project for program quality assurance processes conducted at RMIT University, this paper chronicles the refinement of one aspect: program assessment and reporting. This involved the realignment of criteria used in program quality assurance with those developed in higher-level strategic and business planning processes. In addition, the project attempted to address the lack of alignment between annual program processes and subsequent decisions made about the future of programs, particularly in profile planning processes.
A revised Program Annual Report process was developed that aimed to achieve simplicity and alignment while re-engaging program leaders and heads of schools with the quality agenda. A concerted effort was made to develop a process that improved on previously poor vertical communication inherent in program quality assurance. This paper explores the ways in which this was achieved by a) linking people to data through the use of agreed and contextualised performance indicators, and b) linking people to process through more meaningful input into planning and opportunity for dialogue.

The accuracy of housing forecasting in Australia

Forecasting is an integral part of all business planning, and forecasting the outlook for housing is of interest to many firms in the housing construction sector. This research measures the performance of a number of industry forecasting bodies; this is done to provide users with an indicator of the value of housing forecasting undertaken in Australia. The accuracy of housing commencement forecasts of three Australian organisations – the Housing Industry Association (HIA), the Indicative Planning Council for the Housing Industry (IPC) and BIS-Shrapnel – is examined through the empirical analysis of their published forecasts supplemented by qualitative data in the form of opinions elicited from several industry “experts” employed in these organisations. Forecasting performance was determined by comparing the housing commencement forecast with the actual data collected by the Australian Bureau of Statistics on an ex-post basis. Although the forecasts cover different time periods, the level of accuracy is similar, at around 11-13 per cent for four-quarter-ahead forecasts. In addition, national forecasts are more accurate than forecasts for individual states. This is the first research that has investigated the accuracy of both private and public sector forecasting of housing construction in Australia. This allows users of the information to better understand the performance of various forecasting organisations.

A fuzzy decision support method for customer preferences analysis based on Choquet integral

The explosion of the Web 2:0 platforms, with massive volume of user generated data, has presented many new opportunities as well as challenges for organizations in understanding consumer's behavior to support for business planning process. Feature based sentiment mining has been an emerging area in providing tools for automated opinion discovery and summarization to help business managers with achieving such goals. However, the current feature based sentiment mining systems were only able to provide some forms of sentiments summary with respect to product features, but impossible to provide insight into the decision making process of consumers. In this paper, we will present a relatively new decision support method based on Choquet Integral aggregation function, Shapley value and Interaction Index which is able to address such requirements of business managers. Using a study case of Hotel industry, we will demonstrate how this technique can be applied to effectively model the user's preference of (hotel) features. The presented method has potential to extend the practical capability of sentiment mining area, while, research findings and analysis are useful in helping business managers to define new target customers and to plan more effective marketing strategies.

Marketing planning and business performance : an empirical study of large Australian organisations

The marketing planning process is said to influence organisational performance. This influence is realised through the adoption of a focused approach aimed at achieving specific marketing objectives, which motivates the adaptation of the internal capabilities of an organisation in facilitating an effective implementation. This study investigated the association of formal marketing planning with business performance. The results showed that marketing planning has a stronger, positive relationship with market share, than with the overall financial performance of the organisation. The study also compared the associations of marketing planning and market orientation variables with the performance measures. The results indicated that the two variables associate at about the same magnitude with market share and the overall financial performance.

The politics of coastal policy, planning and governance in Canada and Australia : business as usual, at a distance, or collaborative?

Canada and Australia are countries with substantial coastal zones which provide significant economic, social and environmental benefits and opportunities. The coastal zones of Canada and Australia also share significant threats such as, pollution, loss of biodiversity, and climate change, while also facing different challenges that are unique to their particular contexts. Effective management of such zones therefore represents a considerable challenge because of the: complexity of biophysical processes; multiple threats faced; uncertainties associated with understandings of such processes and threats, and the multiple jurisdictions and stakeholder viewpoints as to how such environments should be managed. Further, coasts and the sustainability of coastal resources and ecosystems have been argued to represent ‘wicked problems’ such that their governability is called into question. Therefore drawing on recent experiences in coastal policy, planning and governance in Newfoundland, Canada, and Victoria, Australia, this paper assesses the adequacy of current approaches to coastal governance in the two jurisdictions. In doing so we draw on recent policy and governance literature to consider whether coastal policy, planning and governance in Newfoundland and Victoria, reflect a collaborative, neoliberal, or business as usual (ad hoc, top down) approach. Based on such an assessment we consider the prospects for more integrated coastal zone management in each jurisdiction, as well as broader implications for governance and the resilience of coastal systems. It is argued that while both jurisdictions would benefit from a more collaborative approach, the mechanisms for bringing about such an approach would vary and will not come easily in light of institutional and historic barriers.

Strategic thinking versus strategic planning: towards understanding the complementarities

In an environment characterised by flux and uncertainty, a capacity for innovative, divergent strategic thinking rather than conservative, convergent strategic planning is seen as central to creating and sustaining competitive advantage. As the case study of Communications Co. illustrates, scenario planning is one tool that many organisations, committed to redesigning their strategic planning processes, are using with some success. However, scenario planning requires both left- and right-brain thinking styles. The elements of left-brain thinking reflect the planning side of strategy making, while right-brain thinking mirrors the thinking component of strategy making. The relationship between the factors that enable strategic thinking and the level of “emotional intelligence” of business leaders is also considered. The Communications Co. case findings appear to support the view that while strategic thinking capabilities can be nurtured and diffused through an organisation, it will need business leaders with a high degree of emotional intelligence to lead the way.