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The major purpose of this paper is to investigate antecedents, outcomes and processes of business portfolio transformations, including diversifying, refocusing and repositioning portfolio restructurings.

The paper conducts a longitudinal study on the process of business portfolio transformations among the largest 100 European and 100 North American firms during the period of 1998-2010. A newly developed metric is applied that allows a business portfolio transformation to be identified and quantified and process-related research to be conducted.

The study confirms and expands prior literature that postulates that poor performance and over-diversification are key motivations for portfolio restructuring. However, the majority of transformations were not successful, with firm performance further deteriorating in the course of the transformation. The analysis of the transformation process itself reveals that the average transformation took 2.6 years and changed the portfolio composition by 42 per cent. Most transformations are conducted rather continuously over the transformation period and rely heavily on divestitures and acquisitions.

Managers should not to be too optimistic when they consider a major business portfolio restructuring. In particular, diversifying or repositioning transformations have a low success rate, while refocusing transformations are most successful on average. The study of the process of portfolio transformations offers some advice to increase the odds of a successful restructuring.

This longitudinal analysis represents the first study of the process of portfolio transformation by applying a newly developed transformation metric. By uncovering the process characteristics of portfolio transformations among the largest European and North American firms, it provides insights on the occurrence, typical magnitude, duration and order of acquisitions and divestitures of large portfolio transformations.

This study investigates the effects of corporate restructuring – scale and scope, on the financial performance and long‐term competitiveness during the 1980s in a data set of 107 manufacturing firms. Hypotheses were tested using Ordinary‐leastsquare (OLS) Regression model. Overall, this study found that: (1) corporate restructuring scope is inversely associated with firms’ performance, as expected; (2) the effects of restructuring scope on changes in competitiveness offer partial support for our hypotheses; (3) there was no support for the hypothesized relationships between restructuring scale and performance, and between restructuring scale and changes in competitiveness. Implications for future research in corporate restructuring are discussed.

This paper aims to explore the roles different ownership structures, the joint effect of related and unrelated diversification strategies, and previous performance levels have on the restructuring strategies of such firms.

Annual reports of publicly traded firms in the two Chinese stock exchanges are used to collect data. Multiple regression and ANOVA analysis are used to examine the impact of ownership structure types, match between diversification strategies, and previous performance on the change of business scopes of the sample business groups.

Compared to other ownership types, government owned business groups tend to increase their business scope during asset restructuring, while private business groups tend to decrease their scopes through divestitures and spinoffs. Poor previous performance is also found to be negatively related to change in business scopes. The “match” between related and unrelated diversification strategies of the business groups leads to increase in business scopes, while “mismatch” between these two strategies tends to lead to decrease in business scopes.

This study provides some recommendations to managers and public policy makers in emerging economies. There is a need to monitor the changing institutional environment a firm operates in. It is up to the managers of business groups to determine the degree of market imperfections they are facing and the need to compensate with internal market mechanism and social exchange mechanism within the group structure. As China opens its door further to private ownership and foreign ownership, the pressure to increase efficiency and effectiveness along with the continuous improvement of the institutional environment will require that managers adopt strategies that can enhance the competitiveness of the firms, whether it is through further diversification or scope reduction.

This research deepens our understanding of restructuring strategies of Chinese business groups, by linking factors such as ownership structure, diversification strategies, and past performance to scope changes in these groups. It can broaden our understanding of corporate restructuring in transitional economies, such as China and India.

Prior research has found that firms' adoption of digital technologies (i.e. digitalization) enhances transaction efficiency and improves firm performance. However, this finding is based on the assumption that firms respond to consumers' adoption of digital technology (market digitalization) in a timely fashion. The study investigates the impact of market digitalization on firm performance in Latin America, where resistance to change is often higher, despite the positive impact on performance when companies respond to the environmental shock of digitalization by restructuring.

Using data from seven Latin American countries from 1997 to 2018 (Argentina, Brazil, Chile, Colombia, Peru, Venezuela and Mexico), fixed-effects panel regression robustly supports the results.

Most Latin American firms fail to capitalize on the benefits of market digitalization, and their performance declines as a result. The authors extend research on digitalization by incorporating theoretical insights from the restructuring literature, finding that implementing a substantial restructuring strategy is a viable way to overcome market digitalization.

The authors demonstrate that the digitalization–firm performance relationship is more complex than has been described in studies using samples from developed economies. The authors establish restructuring as an effective adaptation strategy in Latin America, although the institutional environment's characteristics may constrain or discourage firms from adopting it.

There are multiple perspectives of divestiture and its performance that require reconciliation. While research finds a positive market response to divestment announcement, divestiture of prior acquisitions are generally viewed negatively. The purpose of this paper is to develop and empirically test different explanations for the divestment of prior acquisitions.

This research employs event study to capture market reaction at acquisition announcement and subsequent divestments in a sample of 69 public US high-technology acquisitions between 2003 and 2008 that were divested by 2015. Only initial acquisitions involving public firms were included from the Thomson One Banker SDC database. Public press releases and companies’ SEC filings were reviewed to track divestitures back to prior acquisitions. Ordinary least squared regression was used to estimate coefficients.

Results indicate a positive relation between acquisition and divestiture performance around announcement dates. This finding rejects the correction of mistake explanation, suggesting that a negative stigma surrounding divestments is largely unwarranted and that investors reward capable acquirer’s divestiture decisions.

Investors do not treat all information signals at divestiture equally. For example, acquisitions made by larger and more profitable firms, or acquisitions paid for with stock, are associated with lower return upon divestiture announcement.

This study finds that investors view divestiture as a proactive strategy, suggesting firms can improve performance by actively managing acquisitions and divestments to optimize their portfolio of businesses.

The paper aims at extending extant research on sources of divestiture gains by suggesting a novel program‐based perspective on divestitures and analyzing the performance of program divestitures in comparison to single “stand‐alone” divestitures.

Based on event study methodology, the authors analyze the abnormal returns of 160 divestiture announcements within the global insurance industry between 1998 and 2007. In contrast to prior research which relied on ex post statistical clustering to identify transaction programs, ad hoc corporate press releases issued with the divestiture announcements are used to categorize program divestitures.

Empirical results suggest that program divestitures generate higher abnormal returns than stand‐alone divestitures. Further analyses into the sources for these higher gains, however, do not provide support for experience effects as significant explanatory factors. Instead, results suggest that the scheduling of divestitures significantly impacts announcement returns.

The scope and single industry setting of the study suggest future cross‐industry research on the influence of divestiture program characteristics on divestiture performance and the conditions under which these programs improve divestiture performance.

Managers are advised to refrain from piecemeal divestiture behavior lacking clear strategic focus. Instead, they are encouraged to bundle their divestitures as part of a divestiture program with a clear strategic intent and shared business logic.

While prior research on divestitures has treated divestitures as isolated events, the paper directs attention towards the analysis of divestiture programs. Further, experience and timing effects, which have been widely absent from prior divestiture studies, are considered.

The purpose of this paper is to examine how corporate headquarters control business units, the governing of which has emerged as a vital issue as business portfolios have grown increasingly complex due to diversification, globalization, and corporate group expansion via spinoffs and mergers and acquisitions.

This study utilized questionnaire survey data from 251 firms listed on the First Section of the Tokyo Stock Exchange. The authors approached the issue of business unit governance by measuring the degree of decentralization and the intensity of monitoring, and compared the governance of internal business units with that of subsidiaries, and analyzed the impact of corporate governance characteristics on business unit governance.

Comparing in‐house business units and subsidiaries, the authors found a significant difference in their governance. The degree of decentralization toward subsidiaries was higher for strategic and personnel decision‐making. However, the complementarity of decentralization and monitoring was not observed for subsidiaries, whereas it was for in‐house business units. Subsidiary monitoring corresponding to decentralization was inadequate. Examining the relationship between corporate governance and business unit governance, the paper found that firms with reformed boards of directors and under a greater degree of pressure from capital markets monitored their business units more strictly.

The paper shows how the business portfolios and governance arrangements of Japanese firms have changed since the 1990s, and analyzes business unit governance based on valuable data obtained from a questionnaire survey.

This paper develops a deeper understanding of the origin, development and implementation of overall change management strategies in multinationals and their implications for competence development and learning practices in UK and German subsidiaries.

The cross‐national research project applies mainly qualitative research methods.

Despite increased integrative attempts by headquarters, especially in two out of three cases, significant differences were found between German and UK subsidiaries in key capabilities and strategic competences as well as in knowledge sharing and learning.

Future research should focus more on micro‐political issues of learning and knowledge sharing, a topic hardly addressed in international management research.

This study shows the enduring influence of national institutional diversity on the management of the MNC.

States that waves of liberalization are blowing across developing countries leading to the creation of new opportunities for multinational corporations (MNCs). Proposes that, MNCs respond to such new opportunities with a set of offensive moves that can give them a salient position in the newly liberalized economies. Posits that domestic firms in India respond to these offensives through a combination of three broad responses and clear emphasis on achieving pre‐emptive market position, attaining a critical size, creating national brands, exploiting national competitive advantages, adopting best international practices and altering core values.

This study aims to examine how evolutionary and ecological forces shape the market strategy and performance of firms after their organizational form was changed by exogenous shock.

Hypotheses are developed based on both evolutionary and ecological perspectives and tested using fixed effect logistics models and a sample of 3,110 firms that were privatized during 1998–2007.

I find that once the organizational form of firms is changed, the market strategy of organizations is shaped by the population density of their old and new organizational forms in their existing market. Moreover, such a market strategy enhances the survival chance of firms.

This study contributes to organizational evolution literature by unpacking the evolution process when exogeneous shock to organizational form takes place. It advances both evolutionary economics and organization ecology theory through integrating them to understand the evolution process of organizations. This study also contributes to the privatization literature through examining the ecological forces that shape the restructuring strategy of firms after privatization and the performance implications of such restructuring.