Home About us Contact
|
Home About us Contact | ||
|
|
||
Corporate Managers (corporate + managers)
Selected AbstractsRealizing the Potential of Real Options: Does Theory Meet Practice?JOURNAL OF APPLIED CORPORATE FINANCE, Issue 2 2005Alexander Triantis The idea of viewing corporate investment opportunities as "real options" has been around for over 25 years. Real options concepts and techniques now routinely appear in academic research in finance and economics, and have begun to influence scholarly work in virtually every business discipline, including strategy, organizations, management science, operations management, information systems, accounting, and marketing. Real options concepts have also made considerable headway in practice. Corporate managers are more likely to recognize options in their strategic planning process, and have become more proactive in designing flexibility into projects and contracts, frequently using real options vocabulary in their discussions. Thanks in part to the spread of real options thinking, today's strategic planners are more likely than their predecessors to recognize the "option" value of actions like the following: , dividing up large projects into a number of stages; , investing in the acquisition or production of information; , introducing "modularity" in manufacturing and design; , developing competing prototypes for new products; and , investing in overseas markets. But if real options has clearly succeeded as a way of thinking, the application of real options valuation methods has been limited to companies in relatively few industries and has thus failed to live up to expectations created in the mid- to late-1990s. Increased corporate acceptance and implementations of real options valuation techniques will require several changes coming together. On the theory side, we need more realistic models that better reflect differences between financial and real options, simple heuristic methods that can be more easily implemented (but that have been carefully benchmarked against more precise models), and better guidance on implementation issues such as the estimation of discount rates for the "optionless" underlying projects. On the practitioner side, we need user-friendly real options software, more senior-level buy-in, more deliberate diffusion of real options knowledge throughout organizations, better alignment of managerial incentives with long-term shareholder value, and better-designed contracts to correct the misalignment of incentives across the value chain. If these challenges can be met, there will continue to be a steady if gradual diffusion of real options analysis throughout organizations over the next few decades, with real options eventually becoming not only a standard part of corporate strategic planning, but also the primary valuation tool for assessing the expected shareholder effect of large capital investment projects. [source] Network, exposure and rhetoric: Italian occupational fields and heterogeneity in constructing the globalized selfGLOBAL NETWORKS, Issue 4 2003Massimiliano Monaci Drawing on the findings of a broad inter-university research programme conducted in Italy, in this article we explore how individuals' transnational networks combine with other dimensions of their social experience in the production of a self-perception of their own ,global identity'. In particular, attention is focused on the structures and social spaces of everyday life in five crucial occupations (corporate managers, financial services workers, artists, media professionals and schoolteachers) where people's professional action is performed simultaneously along local and global axes. Within these groups the globalized self does not merely reflect individuals' engagement in transnational networks, but is also the outcome of a complex process including two added dimensions of social life in the job setting: (1) the degree and type of non-filtered exposure to pressures stemming from the global environment, which both constrain and enable subjective practices of coping with change and ambiguity; and (2) the degree and type of competence in the rhetorics of globalization, namely the level of access to well-known repertoires of interpretive resources for making sense of global trends. This analysis is consistent with social science conceptualizations arguing for a more nuanced understanding of globalization. In this light, not only is globalization a multidimensional process but it also produces a variety of responses and meanings by differently positioned actors. [source] Training corporate managers to adopt a more autonomy-supportive motivating style toward employees: an intervention studyINTERNATIONAL JOURNAL OF TRAINING AND DEVELOPMENT, Issue 3 2009Patricia L. Hardré Management style is treated in a variety of ways across the training and development literature. Yet few studies have tested the training-based malleability of management style in a for-profit, authentic work context. The present research tested whether or not training intervention would help managers adopt a more autonomy-supportive motivating style toward employees and whether or not the employees of these managers would, in turn, show greater autonomous motivation and workplace engagement. Using an intervention-based experimental design, 25 managers from a Fortune 500 company received training consistent with self-determination theory on how to support the autonomy of the 169 employees they supervised. Five weeks after the managers in the experimental group participated in the training, they displayed a significantly more autonomy-supportive managerial style than did nontrained managers in a control group. Further, the employees they supervised showed, 5 weeks later, significantly more autonomous motivation and greater workplace engagement than did employees supervised by control-group managers. We discuss the malleability of managers' motivating styles, the benefits to employees when managers become more autonomy supportive, and recommendations for future training interventions and research. [source] Does Risk Management Add Value?JOURNAL OF APPLIED CORPORATE FINANCE, Issue 3 2005A Survey of the Evidence The fact that 92% of the world's 500 largest companies recently reported using derivatives suggests that corporate managers believe financial risk management can increase shareholder value. Surveys of finance academics indicate that they too believe that corporate risk management is, on the whole, a valueadding activity. This article provides an overview of almost 30 years of broadbased, stock-market-oriented academic studies that address one or more of the following questions: ,Are interest rate, exchange rate, and commodity price risks reflected in stock price movements? ,Is volatility in corporate earnings and cash flows related in a systematic way to corporate market values? ,Is the corporate use of derivatives associated with reduced risk and higher market values? The answer to the first question, at least in the case of financial institutions and interest rate risk, is a definite yes; all studies with this focus find that the stock returns of financial firms are clearly sensitive to interest rate changes. The stock returns of industrial companies exhibit no pronounced interest rate exposure (at least as a group), but industrial firms with significant cross-border revenues and costs show considerable sensitivity to exchange rates (although such sensitivity actually appears to be reduced by the size and geographical diversity of the largest multinationals). What's more, the corporate use of derivatives to hedge interest rate and currency exposures appears to be associated with lower sensitivity of stock returns to interest rate and FX changes. But does the resulting reduction in price sensitivity affect value,and, if so, how? Consistent with a widely cited theory that risk management increases value by limiting the corporate "underinvestment problem," a number of studies show a correlation between lower cash flow volatility and higher corporate investment and market values. The article also cites a small but growing group of studies that show a strong positive association between derivatives use and stock price performance (typically measured using price-to-book ratios). But perhaps the nearest the research comes to establishing causality are two studies,one of companies that hedge FX exposures and another of airlines' hedging of fuel costs,that show that, in industries where hedging with derivatives is common, companies that hedge outperform companies that don't. [source] Identifying and Attracting the "right" Investors: Evidence on the Behavior of Institutional InvestorsJOURNAL OF APPLIED CORPORATE FINANCE, Issue 4 2004Brian Bushee This article summarizes the findings of research the author has conducted over the past seven years that aims to answer a number of questions about institutional investors: Are there significant differences among institutional investors in time horizon and other trading practices that would enable such investors to be classified into types on the basis of their observable behavior? Assuming the answer to the first is yes, do corporate managers respond differently to the pressures created by different types of investors, and, by implication, are certain kinds of investors more desirable from corporate management's point of view? What kinds of companies tend to attract each type of investor, and how does a company's disclosure policy affect that process? The author's approach identifies three categories of institutional investors: (1) "transient" institutions, which exhibit high portfolio turnover and own small stakes in portfolio companies; (2) "dedicated" holders, which provide stable ownership and take large positions in individual firms; and (3) "quasi-indexers," which also trade infrequently but own small stakes (similar to an index strategy). As might be expected, the disproportionate presence of transient institutions in a company's investor base appears to intensify pressure for short-term performance while also resulting in excess volatility in the stock price. Also not surprising, transient investors are attracted to companies with investor relations activities geared toward forward-looking information and "news events," like management earnings forecasts, that constitute trading opportunities for such investors. By contrast, quasi-indexers and dedicated institutions are largely insensitive to shortterm performance and their presence is associated with lower stock price volatility. The research also suggests that companies that focus their disclosure activities on historical information as opposed to earnings forecasts tend to attract quasi-indexers instead of transient investors. In sum, the author's research suggests that changes in disclosure practices have the potential to shift the composition of a firm's investor base away from transient investors and toward more patient capital. By removing some of the external pressures for short-term performance, such a shift could encourage managers to establish a culture based on long-run value maximization. [source] CREATING VALUE IN PENSION PLANS (OR, GENTLEMEN PREFER BONDS)JOURNAL OF APPLIED CORPORATE FINANCE, Issue 4 2003Jeremy Gold Pension funds are typically one-half to two-thirds invested in equities because equities are expected to outperform other financial assets over the long term, and the long-term nature of pension fund liabilities seems well suited to absorbing any short-term return volatility. What's more, U.S. GAAP currently makes it possible to take credit in advance for the higher anticipated earnings on equity investments without acknowledging their inherent risk. But by allowing the higher expected returns from stocks to reduce a company's current pension expenses, the accounting treatment conflicts with some very basic principles of finance (in particular, the idea that investors must earn higher returns on riskier investments just to "break even"), conceals systematic biases in the actuarial analysis, and gives managers considerable latitude to manipulate the bottom line. The authors suggest a startlingly different approach. They argue that pension assets should be invested entirely in duration-matched debt instruments for two reasons: (1) to capture the full tax benefits of pre-funding their pension obligations and (2) to improve overall corporate risk profiles by converting general stock market risk into firm-specific operating risk, where corporate managers should have a comparative advantage and can generate real value. Investing exclusively in bonds would take better advantage of the tax-exempt status of pension plans and greatly reduce fund management costs, while at the same time helping o shore up fund quality and sharpening corporate executives' focus on their real operating assets. [source] SIVs: Could you survive a financial collapse?JOURNAL OF CORPORATE ACCOUNTING & FINANCE, Issue 4 2008Michael Ehrlich The newspapers are suddenly full of worries about structured investment vehicles (SIVs). These are huge, risky investment instruments used by large banks and hedge funds. But fund managers of major companies have invested in money markets, which in turn,unknown to the company fund managers,have invested in the risky SIVs. Any major collapse of the SIVs could spread financial panic. So what are corporate managers to do? Are there strategies to avoid financial disaster? And what questions should auditors ask right now? © 2008 Wiley Periodicals, Inc. [source] The Puzzle of Financial Reporting and Corporate Short-Termism: A Universal Ownership PerspectiveAUSTRALIAN ACCOUNTING REVIEW, Issue 4 2009Michael E. Drew This study considers the controversy surrounding financial reporting and corporate short-termism as a puzzle. The question remains as to why corporate managers and investors persist in exhibiting behaviours that trade off long-term value creation for meeting short-term financial targets. Using inter-temporal choice theory, the myopia characterising decision-making is entirely rational, given the set of incentives faced. This study views the puzzle through the prism of universal owners (pension and superannuation funds), arguing that the investment policies or ,mandates' implemented by these financial behemoths is the source of the myopic behaviour. The paper explores a range of policies that universal owners may consider implementing to ensure that the payoffs to corporate managers and investors are optimised through the pursuit of long-termism. [source] Managerial attitudes toward environmental management within Australia, the People's Republic of China and IndonesiaBUSINESS STRATEGY AND THE ENVIRONMENT, Issue 1 2008Lorne S. Cummings Abstract This study presents a survey of the attitudes of corporate managers and managerial students across Australia, the People's Republic of China and Indonesia toward 18 key contemporary environmental management issues. The study sought to explore whether respondents from these countries, characterized by differing levels of development, also differ in their attitude toward environmental management. Results indicated that, despite age being a moderating factor, significant differences did exist between the 676 country respondents on 15 of the 18 questions. Contrary to expectations, Australian respondents were more cautious of supporting a forthright view on environmental issues, whilst Chinese respondents favoured a more centralized approach to decision making regarding the environment. The results lend marginal support to the new environmental paradigm (NEP), but also to the radicalization of environmental issues and age as a possible influence on respondent beliefs. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment. [source] | |||||||||||||