Do private equity and venture capital backed firms have better corporate governance after going public?

Mercados financeiros e finanças corporativas

Structural differentiation and corporate venturing : the moderating role of formal and informal integration mechanisms

Research has suggested that corporate venturing is crucial to strategic renewal and firm performance, yet scholars still debate the appropriate organizational configurations to facilitate the creation of new businesses in existing organizations. Our study investigates the effectiveness of combining structural differentiation with formal and informal organizational as well as top management team integration mechanisms in establishing an appropriate context for venturing activities. Our findings suggest that structural differentiation has a positive effect on corporate venturing. In addition, our study indicates that a shared vision has a positive effect on venturing in a structurally differentiated context. Socially integrated senior teams and cross-functional interfaces, however, are ineffective integration mechanisms for establishing linkages across differentiated units and for successfully pursuing corporate venturing.

Knowledge Transfer within Western Multinationals' Subsidiary Units in China and Finland - The Impact of Headquarter Control Mechanisms, Subsidiary Location and Social Capital (summary section only)

It is suggested that the ability and practices of how the multinational corporation (MNC) manages knowledge transfer among its geographically dispersed subsidiary units are crucial for the building and development of firm competitive advantage. However, cross-border transfer of valuable organizational knowledge is likely to be problematic and laborious, especially within diversified and differentiated MNCs. Using data collected from 164 western multinational companies’ subsidiary units located in China and Finland, this study aims to investigate cross-border knowledge transfer within the MNC. It explores a number of factors that influence the transfer of knowledge among units in the differentiated MNC. The study consists of five individual papers. Paper 1 investigates a range of organizational mechanisms that may positively influence a subsidiary’s propensity to undertake knowledge transfers to other parts of the corporation. Paper 2 explores the impact of subsidiary location on the motivational dispositions of knowledge receiving units to value and accept knowledge from subsidiaries located in economically less advanced countries. Paper 3 examines the influence of social capital variables on knowledge transfer in dyadic relationships between foreign-owned subsidiaries and their sister and patent units. Paper 4 provides some initial insights into potentially different effects of trust and shared vision in intra-organizational vs. inter-organizational relationships. Using a case study setting, Paper 5 explores means and mechanisms used in transferring human resource management practices to Western MNCs’ business units in China from a cultural perspective. The results of the study show that MNC management through choices regarding organizational controls can encourage and enhance corporate-internal knowledge transfer. It also finds evidence that more knowledge is transferred from subsidiaries located in an industrialized country (e.g., Finland) than subsidiaries located in a developing country (e.g., China). While the study has highlighted the importance of social capital in promoting knowledge transfer, it has also uncovered some new findings that the effect of trust and shared vision may be contingent upon different contexts. Finally, in Paper 5, a number of mechanisms used in transferring selected HRM practices and competences to the Chinese business units have been identified. The findings suggest that cultural differences should be taken into consideration in the choice and use of different transfer mechanisms.

Evolving corporate entrepreneurship strategy: Technology incubation at Philips

Established firms tend to pursue incremental innovation by modifying and refining their existing products and processes rather than developing radical innovations. In the face of resistance to change and incumbent inertia, which prevent the generation of novelty, established firms have turned towards corporate entrepreneurship as a means of exploiting knowledge accumulated within its own boundaries and exploring external markets. This paper focuses on one mode of corporate entrepreneurship, corporate incubation, informed by a study of a Technology Incubator at Philips. An account of the history of the incubator traces its progress from its inception in 2002-2006 when further incubators were formed, building on this experience and focusing on lifestyle and healthcare technologies. We identify ways in which the Philips incubator represents an alternative selection environment that effectively simulated the venture capitalist model of entrepreneurial innovation. © 2009 Blackwell Publishing Ltd.

Unlocking synergies between business units: internal value creation at Royal Vopak.

This paper examines the process of creating and exploiting synergies between business units of a multi-unit corporation and the creation of internal value by combining and exploiting knowledge. It offers a framework to create and manage such synergies and undertakes an empirical test through in-depth study across three business units of Royal Vopak, a Dutch-based global multi-unit corporation. Finally, it offers lessons for corporate managers trying to create and manage cross-unit synergies.

In Search of Corporate Renewal: How to Benefit from Corporate Venturing?

Despite the rapid change in today's business environment there are relatively few studies about corporate renewal. This study aims for its part at filling that research gap by studying the concepts of strategy, corporate renewal, innovation and corporate venturing. Its purpose is to enhance our understanding of how established companies operating in dynamic and global environment can benefit from their corporate venturing activities. The theoretical part approaches the research problem in corporate and venture levels. Firstly, it focuses on mapping the determinants of strategy and suggests using industry, location, resources, knowledge, structure and culture, market, technology and business model to assess the environment and using these determinants to optimize speed and magnitude of change.Secondly, it concludes that the choice of innovation strategy is dependent on the type and dimensions of innovation and suggests assessing market, technology, business model as well as novelty and complexity related to each of them for choosing an optimal context for developing innovations further. Thirdly, it directsattention on processes through which corporate renewal takes place. On corporate level these processes are identified as strategy formulation, strategy formation and strategy implementation. On the venture level the renewal processes are identified as learning, leveraging and nesting. The theoretical contribution of this study, the framework of strategic corporate venturing, joins corporate and venture level management issues together and concludes that strategy processes and linking processes are the mechanism through which continuous corporate renewaltakes place. The framework of strategic corporate venturing proposed by this study is a new way to illustrate the role of corporate venturing as a purposefullybuilt, different view of a company's business environment. The empirical part extended the framework by enhancing our understanding of the link between corporate renewal and corporate venturing in its real life environment in three Finnish companies: Metso, Nokia and TeliaSonera. Characterizing companies' environmentwith the determinants of strategy identified in this study provided a structured way to analyze their competitive position and renewal challenges that they arefacing. More importantly the case studies confirmed that a link between corporate renewal and corporate venturing exists and found out that the link is not as straight forward as indicated by the theory. Furthermore, the case studies enhanced the framework by indicating a sequence according to which the processes work. Firstly, the induced strategy processes strategy formulation and strategy implementation set the scene for corporate venturing context and management processes and leave strategy formation for the venture. Only after that can strategies formed by ventures come back to the corporate level - and if found viable in the corporate level be formalized through formulation and implementation. With the help of the framework of strategic corporate venturing the link between corporaterenewal and corporate venturing can be found and managed. The suggested response to the continuous need for change is continuous renewal i.e. institutionalizing corporate renewal in the strategy processes of the company. As far as benefiting from venturing is concerned the answer lies in deliberately managing venturing in a context different to the mainstream businesses and establishing efficientlinking processes to exploit the renewal potential of individual ventures.

The role of serviced offices in the corporate real estate supply chain

The paper analyses the evolving corporate real estate supply chain and the interaction of this evolution with emerging business models in the serviced office sector. An enhanced model of the corporate real estate portfolio is first presented incorporating vacant, alienated and transitory space. It is argued that the serviced office sector has evolved in response to an increasingly diverse corporate real estate portfolio. For the peripheral corporate real estate portfolio, the core serviced workspace product provides the ability to rapidly acquire high-quality workspace and associated support services on very flexible bases. Whilst it is arguably a beta product, the core workspace offer is now being augmented by managed office or back-to-back leases which enables clients to complement the advantages of serviced offices with a wider choice of premises. Joint venture business models are aligned with solutions to problems of vacant space.

Um estudo sobre o poder de certificação dos fundos de private equity e venture capital nos IPOs realizados no mercado brasileiro

A melhora na situação econômica do Brasil, observada nos últimos anos, resultou em um aumento expressivo no número de IPOs realizados no mercado brasileiro tornando o mecanismo de desinvestimento através do mercado de capitais em uma boa opção para os fundos de Private Equity/Venture Capital, fato que não era visto no período anterior a 2004. No período de janeiro de 2004 a maio de 2007 foi possível notar um fato inédito para o mercado brasileiro, dos 61 IPOs que ocorreram, 26 foram realizados por firmas que tinham um fundo de Private Equity/Venture Capital como acionista. Devido a assimetria de informação, o preço de emissão é tipicamente inferior ao preço de mercado da ação após o IPO, sendo esse “fenômeno” conhecido na literatura como underpricing. Essa dissertação busca examinar o papel de certificação que um fundo de Private Equity/Venture Capital pode exercer nas emissões de ações no Brasil no período de 2004 a maio de 2007, reduzindo assim a assimetria de informação existente, através de uma análise do underpricing dos IPOs de empresas que tem fundos de Private Equity/Venture Capital como acionistas, e de empresas que não tem. Encontramos evidência que sugere que no mercado brasileiro apenas empresas com um bom grau de governança e transparência tem acesso ao Mercado de capitais através de IPOs, tirando, desta forma, a importância do poder de certificação exercido pelos fundos de Private Equity/Venture Capital em reduzir a assimetria de informação existente.

Highway signs: conversion to metric units could be costly.

Mode of access: Internet.

Field strength measurements of speed measuring radar units. Interim report.

National Highway Traffic Safety Administration, Washington, D.C.

New directions for international retail joint venture research

This paper contends that a range of questions arising from the geographical and organizational dynamics of international retail joint ventures have been bypassed by studies in the international retail field. It argues that, despite its importance as a corporate growth strategy, comparatively less is known about the way in which retailers have employed joint ventures in international markets. Based on a review of the literature and illustrated with examples of international retail joint venturing activity, this paper reveals several gaps in our understanding of the internationalization process of retail firms. Suggestions for further research are made throughout the paper on the basis of gaps in the retailer internationalization literature.

General and multiplicative non-parametric corporate performance models with interval ratio data

The increasing intensity of global competition has led organizations to utilize various types of performance measurement tools for improving the quality of their products and services. Data envelopment analysis (DEA) is a methodology for evaluating and measuring the relative efficiencies of a set of decision making units (DMUs) that use multiple inputs to produce multiple outputs. All the data in the conventional DEA with input and/or output ratios assumes the form of crisp numbers. However, the observed values of data in real-world problems are sometimes expressed as interval ratios. In this paper, we propose two new models: general and multiplicative non-parametric ratio models for DEA problems with interval data. The contributions of this paper are fourfold: (1) we consider input and output data expressed as interval ratios in DEA; (2) we address the gap in DEA literature for problems not suitable or difficult to model with crisp values; (3) we propose two new DEA models for evaluating the relative efficiencies of DMUs with interval ratios, and (4) we present a case study involving 20 banks with three interval ratios to demonstrate the applicability and efficacy of the proposed models where the traditional indicators are mostly financial ratios. © 2011 Elsevier Inc.

State subsidy and moral hazard in corporate financing

This paper investigates the impact of state subsidy on the behavior of the entrepreneur under asymmetric information. Several authors formulated concerns about state intervention as it can aggravate moral hazard in corporate financing. In the seminal paper of Holmström and Tirole (1997) a two-player moral hazard model is presented with an entrepreneur initiating a risky scalable project and a private investor (e.g. bank or venture capitalist) providing outside financing. The novelty of our research is that this basic moral hazard model is extended to the case of positive externalities and to three players by introducing the state subsidizing the project. It is shown that in the optimum, state subsidy does not harm, but improves the incentives of the entrepreneur to make efforts for the success of the project; hence in effect state intervention reduces moral hazard. Consequently, state subsidy increases social welfare which is defined as the sum of private and public net benefits. Also, the exact form of the state subsidy (ex-ante/ex-post, conditional/unconditional, refundable/nonrefundable) is irrelevant in respect of the optimal size and the total welfare effect of the project. Moreover, in case of nonrefundable subsidies state does not crowd out private investors; but on the contrary, by providing additional capital it boosts private financing. In case of refundable subsidies some crowding effects may occur depending on the subsidy form and the parameters.

Managerial experiences related to corporate demerger

In the current economic situation very few business operations are static. In some cases, organizations feel that the most rational solution is not expanding but focusing on their core competencies or certain areas of business through corporate restructuring. The focus in this thesis is on corporate demerger, a process that involves a complete separation of units within a company. Despite the vast amount of research considering corporate demergers, there is still a lack of knowledge about how top managers experience these kinds of organizational rearrangements. In this qualitative case study, the aim is to bring forward the thoughts of executives in two companies that emerged from a single company through corporate demerger a few years ago. By conducting dyadic semi-structured interviews with the management group and board members in both the parent company and the demerger company, I pursue to understand the impressions that they had during the demerger process as well as during the change that followed afterwards. Additionally, their retrospective sense-making patterns are briefly examined. The findings suggest that the way operations are managed before plays an important role in the demerger process. In this case the pre-demerger organization was quite distinctly divided into two business areas, which allowed a somewhat natural allocation of resources. In addition, apart from the top management, every employee knew their future company and role, thus decreasing the amount of uncertainty in lower organizational levels. Consequently, the ambiguity and change faced by the top executives was evidently more powerful compared to the operational actors. The fragmented characteristics also enabled certain points of reference in the unfolding demerger process. Along with the information about future management groups, the pre-demerger re-grouping took place. This sparked up the mental division, where both groups started to act separately. On a personal level, the managers involved in the demerger planning have made retrospective sense of the repercussions related to the restructuring process. For them, it was an extremely demanding, ambiguous and burdensome project that provided them with managerial experiences they are likely not to have again.

The Behavior of Hydroxyl Units of Synthetic Goethite and its Dehydroxylated Product Hematite

The behavior of the hydroxyl units of synthetic goethite and its dehydroxylated product hematite was characterized using a combination of Fourier transform infrared (FTIR) spectroscopy and X-ray diffraction (XRD) during the thermal transformation over a temperature range of 180-270 degrees C. Hematite was detected at temperatures above 200 degrees C by XRD while goethite was not observed above 230 degrees C. Five intense OH vibrations at 3212-3194, 1687-1674, 1643-1640, 888-884 and 800-798 cm(-1), and a H2O vibration at 3450-3445 cm(-1) were observed for goethite. The intensity of hydroxyl stretching and bending vibrations decreased with the extent of dehydroxylation of goethite. Infrared absorption bands clearly show the phase transformation between goethite and hematite: in particular. the migration of excess hydroxyl units from goethite to hematite. Two bands at 536-533 and 454-452 cm(-1) are the low wavenumber vibrations of Fe-O in the hematite structure. Band component analysis data of FTIR spectra support the fact that the hydroxyl units mainly affect the a plane in goethite and the equivalent c plane in hematite.