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Article
Publication date: 1 September 2006

Patricia Everaert, Stijn Loosveld, Tom Van Acker, Marijke Schollier and Gerrit Sarens

Despite appearing in the literature over 10 years ago as a potentially exciting cost management technique, there is still limited agreement about the nature of target

Abstract

Purpose

Despite appearing in the literature over 10 years ago as a potentially exciting cost management technique, there is still limited agreement about the nature of target costing. The purpose of this study is to explore the characteristics of target costing, and to test whether these characteristics were adopted in three European companies that used target costing.

Design/methodology/approach

This paper draws on case study data, collected at three manufacturing companies (consumer electronics, machinery, and transportation equipment).

Findings

The paper identifies eight characteristics of target costing, based on the early Japanese case descriptions. These characteristics are related to the way a target is set and how progress towards that target is measured. The findings of the case studies confirm these characteristics. However, some differences were found regarding the interpretation of the strict rule that “the target cost cannot be exceeded at product launch”.

Research limitations/implications

The results indicate that future research on the adoption of target costing cannot be disconnected from its characteristics. Further studies might investigate whether degree of openness to suppliers, leadership position, time pressure and position in the supply chain can explain the noted differences in characteristics among companies.

Practical implications

The characteristics identified in this paper provide an aid to researchers and managers considering target costing. Detailed case descriptions provide best practices examples for other companies.

Originality/value

This study is the first empirical paper concerned with describing the typical characteristics of target costing. By exploring the characteristics, we hope to inspire others to further explore this interesting phenomenon.

Details

Qualitative Research in Accounting & Management, vol. 3 no. 3
Type: Research Article
ISSN: 1176-6093

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Article
Publication date: 1 January 2002

Rashidah Abdul Rahman

This study focused on analysing the effect of acquisition characteristics on post‐acquisition operating performance for 83 bids consisting of 83 public listed bidders…

Abstract

This study focused on analysing the effect of acquisition characteristics on post‐acquisition operating performance for 83 bids consisting of 83 public listed bidders acquiring 80 private, 2 public listed and 1 non‐public listed targets in Malaysia during the period 1988–1992. The specific bid characteristics analysed are business relatedness, management turnover, the relative size of targets to bidders, the method of payment offered and board of directors' ownership structure. Since the specific feature of the current sample is that it consists mainly of privately owned targets, the characteristics of disciplinary bids found in acquisitions of public listed targets were not expected in agreed bids between the bidders and targets in this study. The results indicate that the target directors' turnover and the directors' share ownership do not have a significant effect on the post‐acquisition performance. Rather it appears that, if anything, retention of existing management is more likely to lead to performance improvement. Further analysis shows that replacement of target management has no impact on post‐acquisition performance regardless of the relatedness line of business. The latter findings reinforce the unique characteristics of the data set used in the current analysis of acquisitions of privately owned Malaysian companies in which unique skills of previous directors may often be retained post‐acquisition regardless of the business relatedness. The study also provides evidence that acquisitions of highly related business between target and acquiring firm, large relative size of target to bidders and payment for the acquisition by shares have a significant positive impact on post‐acquisition control‐adjusted performance. However, highly related business between target and bidder and payment by shares are the only significant acquisition characteristics that have a significant positive impact on the post‐acquisition control‐adjusted performance when multiple regression is used.

Details

Asian Review of Accounting, vol. 10 no. 1
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 20 November 2020

Viet Anh Hoang, Man Dang, Ngoc Vu Nguyen, Ngoc Thang Nguyen and Darren Henry

The purpose of this paper is to investigate the effects of cross-country characteristics on acquirers' target status choice in cross-border mergers and acquisitions across…

Abstract

Purpose

The purpose of this paper is to investigate the effects of cross-country characteristics on acquirers' target status choice in cross-border mergers and acquisitions across 41 emerging markets.

Design/methodology/approach

The paper first reviews the existing literature and develops the related hypotheses, in conjunction with the objectives of this paper. We then describe the data employed, variable measurement and examine the effects of cross-country characteristics on the acquirers' target status choice in cross-border mergers and acquisitions while controlling for firm-level and deal-specific characteristics. The paper continues to conduct the robustness check on cross-country determinants of target status choices using the difference independent variables rather than target country-level variables only.

Findings

This research found that the likelihood of a public firm acquired relative to private one is higher if the target firm is located in countries with stronger government quality, weaker economic freedom, better financial market development and lower cultural distance between the host and home countries. The results suggest that bidders actively assess cross-country characteristics as part of their acquisition planning.

Originality/value

Rather than commonly analysed determinants in the previous research such as firm- and deal-specific attributes, value creation and shareholder protection, this paper indicates that institutional environments and economic conditions are closely associated with acquisition risks and benefits and have direct influences on bidder firms' acquisition bidding planning and target choice decision-making.

Details

Journal of Economics and Development, vol. 23 no. 2
Type: Research Article
ISSN: 1859-0020

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Article
Publication date: 16 January 2017

Hanshan Li

The purpose of this paper is to evaluate the detection performance of infrared photoelectric detection system and establish stable tracking platform.

Abstract

Purpose

The purpose of this paper is to evaluate the detection performance of infrared photoelectric detection system and establish stable tracking platform.

Design/methodology/approach

This paper puts forward making use of the finite element analysis method to set up the infrared radiation characteristics calculation model of flying target in infrared photoelectric detection system; researches the target optical characteristics based on the target imaging detection theory; sets up the heat balance equation of target’s surface node and gives the calculation method of total radiation intensity of flying target; and deduces the target detection distance calculation function; studies the changed regulation of radiation energy that charge coupled device (CCD) gain comes from target surface infrared heat radiations under different sky background luminance and different target flight attitude.

Findings

Through calculation and experiment analysis, the results show that when the target’s surface area increases or the target flight velocity is higher, the radiation energy that CCD obtained is higher, which is advantageous to the target stable detection in infrared photoelectric detection system.

Originality/value

This paper uses the finite element analysis method to set up the infrared radiation characteristics calculation model of flying target and give the calculation and experiment results; those results can provide some data and improve the design method of infrared photoelectric detection system, and it is of value.

Details

Sensor Review, vol. 37 no. 1
Type: Research Article
ISSN: 0260-2288

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Article
Publication date: 7 December 2015

Simone Thomas, Maike Scherrer-Rathje, Maria Fischl and Thomas Friedli

To cope with the increasing challenges of globalisation, various manufacturing companies have established intra-company manufacturing networks. The purpose of this paper…

Abstract

Purpose

To cope with the increasing challenges of globalisation, various manufacturing companies have established intra-company manufacturing networks. The purpose of this paper is to link the strategic network targets (i.e. accessibility, thriftiness represented by economies of scale and economies of scope, mobility, and learning) with the capabilities and characteristics of the constituting sites of the manufacturing network and thus facilitate the identification of mismatches and the discussion of possible development paths for the network.

Design/methodology/approach

The authors derive a conceptual framework from the literature which is tested with a single case; a manufacturing network consisting of eight manufacturing sites. Case data were collected based on 24 interviews with operations managers at network level and a standardised online survey among the sites’ management teams.

Findings

Results indicate that manufacturing network and site levels need to be related when striving for a fit between manufacturing strategy, network strategy, and site capabilities and characteristics.

Research limitations/implications

Single case studies have only limited generalisability. Nevertheless, the case demonstrates the usefulness of several dimensions when analysing manufacturing networks on site and network level.

Originality/value

This paper represents the first attempt to link strategic targets of intra-company manufacturing networks with site capabilities and characteristics. Thereby, it provides a theoretical basis for future research on the relationship between strategic targets of manufacturing networks and their fulfilment. The developed manufacturing site portfolio, moreover, extends the site role typology discussion by a multi-dimensional perspective and represents a starting point for a multi-faceted discussion of site roles.

Details

International Journal of Operations & Production Management, vol. 35 no. 12
Type: Research Article
ISSN: 0144-3577

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Article
Publication date: 1 October 2002

Stanley F. Stasch

Based upon a study of between fifty to sixty case examples of new venture start‐ups, the author presents a screening procedure for entrepreneurs to use when evaluating…

Abstract

Based upon a study of between fifty to sixty case examples of new venture start‐ups, the author presents a screening procedure for entrepreneurs to use when evaluating whether a proposed low‐budget marketing strategy for a new venture shows promise of being successful. The procedure consists of four sets of screening conditions. A well‐designed marketing strategy should have a reasonably good chance of being successful if it (1) will tightly integrate the product/service and price offerings, the intended distribution method, and the intended promotion plan with the new venture’s designated target market, (2) will encounter no serious marketing strategy execution difficulties which cannot be resolved, (3) uses marketing concepts which can be executed with a small marketing budget, and (4) displays three characteristics believed to be strongly associated with marketing strategies that are successful over the long term.

Details

Journal of Research in Marketing and Entrepreneurship, vol. 4 no. 3
Type: Research Article
ISSN: 1471-5201

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Article
Publication date: 11 July 2020

Hicham Meghouar and Mohammed Ibrahimi

The purpose of this research is to highlight the financial characteristics of large French targets which were subject to takeovers during the period 2001–2007 and…

Abstract

Purpose

The purpose of this research is to highlight the financial characteristics of large French targets which were subject to takeovers during the period 2001–2007 and thereafter deduct the implicit motivations of acquirers.

Design/methodology/approach

Using a global sample of 128 French listed companies (64 targets and 64 non-targets), the authors carried out Wilcoxon–Mann–Whitney testing and logistic regression in order to test nine hypotheses likely to discriminate between the two categories of companies (targets and non-targets).

Findings

According to the results, target firms are more unbalanced in terms of growth resources and less rich in liquidity than their peers. They have unused debt capacity, offer greater opportunities for growth than firms in the control group and present low levels of value creation.

Research limitations/implications

The main limitation of this study is regarding the sample size, limited by the exclusive use of large firms (deals of over $100m). The scope of this research could be broadened in future by including medium-sized companies.

Practical implications

The authors believe that their results have two major implications. First, they enable market investors to achieve abnormal returns by investing in predicted targets through a portfolio of high takeover probability firms. Second, CEO of companies that are potentially targeted can assess their takeover likelihood in order to act and to manage such a situation for the benefit of their shareholders.

Originality/value

This research concerns the last wave of takeover prior to the subprime-mortgage financial crisis (2001–2007), a period that has not been sufficiently covered in empirical studies. This research contributes to the existing literature in two main respects. First, the results of this study improve our understanding of motivations for takeovers, particularly in the French context. Second, the introduction of new accounting and financial variables, not previously tested in the literature, enriches the available information concerning the profile of takeover targets.

Details

EuroMed Journal of Business, vol. 16 no. 1
Type: Research Article
ISSN: 1450-2194

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Article
Publication date: 1 August 2016

Reza Yaghoubi, Mona Yaghoubi, Stuart Locke and Jenny Gibb

This paper aims to review the relevant literature on mergers and acquisitions in an attempt to provide a comprehensive account of what we know about mergers and which…

Abstract

Purpose

This paper aims to review the relevant literature on mergers and acquisitions in an attempt to provide a comprehensive account of what we know about mergers and which parts of the puzzle are still incomplete.

Design/methodology/approach

This literature review consists of three key sections. The first part of this paper summarises the literature on the cyclical nature of mergers referred to in the literature as merger waves. The second section reviews the causes and consequences of takeovers; it first reviews the causes, or drivers, of acquisitions, while focusing on the fact that acquisitions happen in waves and then reviews the consequences of takeovers, with a predominant focus on the impacts of mergers on the economic performance of acquirers. The third part of the review summarises the theories, as well as previous empirical studies, on determinants of announcement returns and post-acquisition performance of combined firms.

Findings

Merger activity demonstrates a wavy pattern, i.e. mergers are clustered in industries through time. The causes suggested for this fluctuating pattern include industry- and economy-level shocks, mis-valuation and managerial herding. Market reaction to announcement of acquisitions is, on average, slightly negative for acquirer stocks and significantly positive for target stocks. The combined abnormal return is positive. These findings have been consistent over several decades of investigation. Prior research also identifies a number of factors that are related to performance of acquisitions. These factors are categorised and reviewed in five different groups: acquirer characteristics, target characteristics, bid characteristics, industry characteristics and macro-environment characteristics.

Originality/value

This review illustrates a number of issues. Prior research is heavily biased towards gains to acquirers and factors that affect these gains. It is also biased towards finding sources of value creation through mergers despite the fact that several theories suggest that mergers can be value-destroying. In fact, value destruction is often attributed to managers’ self-interest (agency problem) and mistakes (hubris). However, the mechanisms through which mergers destroy value are rarely addressed. Aside from that, the possibility of simultaneous creation and destruction of value in acquisitions is not often considered. Finally, after several decades of investigation, a key question is not completely answered yet: “What are the sources of value in mergers and acquisitions?”

Details

Studies in Economics and Finance, vol. 33 no. 3
Type: Research Article
ISSN: 1086-7376

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Article
Publication date: 9 June 2021

Abongeh Tunyi

This paper aims to review prior studies and presents a synthesis of the takeover prediction literature spanning the period 1968–2018.

Abstract

Purpose

This paper aims to review prior studies and presents a synthesis of the takeover prediction literature spanning the period 1968–2018.

Design/methodology/approach

The paper adopts a narrative review approach. It explores prior studies on takeover target prediction from a historical perspective, focusing on the evolution and development of the literature over the 50-year period.

Findings

From a historical development perspective, prior studies in the area can be partitioned into four distinct eras. Studies in the first era (1968–1985) mainly established that takeover targets share common characteristics which can be captured with financial ratios. Studies in the second era (1986–2002) developed and extended formal target prediction hypotheses. These studies concluded that it was impossible to build a successful investment strategy around takeover target prediction. Studies in the third era (2003–2009) explored similar questions using alternative modelling techniques but arrive at similar results – targets can be predicted with limited accuracy and target prediction is unlikely to lead to abnormal returns. Studies in the fourth era (2010–2018) explore implications of M&A predictability on share valuation, governance and bond prices (amongst others), but most importantly, provide some evidence that takeover prediction can lead to abnormal returns when combined with appropriate screening strategies.

Originality/value

This presents the first in-depth review of the literature on takeover target prediction. It highlights the development of the literature over four distinct eras and identifies several limitations, research gaps and opportunities for future research. Given the recent decline in the literature (i.e. fourth era), this study may stimulate new research in the area.

Details

Qualitative Research in Financial Markets, vol. 13 no. 4
Type: Research Article
ISSN: 1755-4179

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Book part
Publication date: 17 November 2011

David Melamed

In this chapter, I detail a procedure for incorporating status characteristics with more than two ordered states, or graded status characteristics, into status…

Abstract

In this chapter, I detail a procedure for incorporating status characteristics with more than two ordered states, or graded status characteristics, into status characteristics theory. I revise theoretical definitions and assumptions accordingly. The new procedure adds a weighting function to the existing mathematical structure of the theory. I show that estimates using the new procedure are consistent with findings drawn from four experiments that were run in the standard setting for status characteristics theory. I also show that the procedure explains more variation and improves global model fit when predicting expectations using newly collected vignette data. I conclude with a general discussion of the procedures and implications for other expectation states theories and for research conducted outside the laboratory.

Details

Advances in Group Processes
Type: Book
ISBN: 978-0-85724-774-2

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