Search results

To provide an overview of research published in the management accounting literature on methods for cost management in new product development, such as a target costing, life cycle costing, component commonality, and modular design.

The structured literature search covered papers about 15 different cost management methods published in 40 journals in the period 1990–2013.

The search yielded a sample of 113 different papers. Many contained information about more than one method, and this yielded 149 references to specific methods. The number of references varied strongly per cost management method and per journal. Target costing has received by far the most attention in the publications in our sample; modular design, component commonality, and life cycle costing were ranked second and joint third. Most references were published in Management Science; Management Accounting Research; and Accounting, Organizations and Society. The results were strongly influenced by Management Science and Decision Science, because cost management methods with an engineering background were published above average in these two journals (design for manufacturing, component commonality, modular design, and product platforms) while other topics were published below average in these two journals.

The scope of this review is accounting research. Future work could review the research on cost management methods in new product development published outside accounting.

The paper centers on methods for cost management, which complements reviews that focused on theoretical constructs of management accounting information and its use.

We empirically investigate the hypothesis that the less transparent (more difficult to value) the target’s assets are the more likely it is that the acquiring firm can obtain higher short- and long-term returns. We analyze a sample of 1,538 friendly acquisitions partitioned in two separate dimensions: acquisitions of public versus private firms, and acquisitions of a firm’s assets versus acquisitions of a firm’s assets and its management. Using a sample of (nondiversifying) real estate transactions with a public REIT as the acquirer, we find that acquisitions of public firms have insignificant short-term abnormal returns. Acquisitions of private targets have positive and significant short-term abnormal returns. The acquirer’s abnormal returns are higher in both cases when the transactions involve acquisition of the target firm’s management. We find parallel results when analyzing the acquirer’s Q over the merger year and the three following years. Our conclusions are robust to the type of financing (cash, stock, or a combination) used in the acquisition.

The purpose of this paper is to examine the impact of inter-group conflicts on the trust toward the acquirer and then further on cooperation intention after acquisitions in cross-border mergers and acquisitions (M&As), in the lens of the social classification theory. Two types of conflicts (realistic conflicts and symbolic conflicts) and a mediating mechanism (trust toward the acquirer) exhibit different effects on cooperation intention. The research further examines two moderating coping strategies (localizing management and assigning trustworthy expatriate managers) and tests their effectiveness in promoting trust toward the acquirer and increasing cooperation intention in cross-border M&As.

The research hypotheses were empirically tested in the context of post-acquisition of Chinese companies' cross-border M&As. In total, 600 questionnaires were provided to the research participants of 37 acquired firms/units from advanced economies of 12 Chinese companies, and 209 valid questionnaires were collected (the response rate is 34.83%). Confirmatory factor analysis was conducted to verify data validity and hierarchical multiple regression analyses were employed to test relational and moderating effects.

This research demonstrates that both realistic and symbolic conflicts can reduce the intention to cooperate, but the latter does not have a significant influence. The results also uncover that whether employees from acquired firms trust in their acquirers mediates the relationship between realistic conflicts and cooperation intention. Moreover, management localization (a measurement of whether local/original managers are retained with a high degree of freedom and autonomy after M&As) and trustworthiness of expatriate managers (a measurement of whether the assigned expatriate managers is trustworthy) positively moderate the relation between realistic conflicts and trust toward the acquirer. In addition, trust toward the acquirer mediates the interaction of realistic conflicts and management localization on the cooperation intention of the acquirers' employees.

This study examines how inter-organizational conflicts influence trust toward the acquirer and then cooperation intentions in the context of Chinese companies' M&A behavior of targets from developed countries and gain supportive evidence, which enriches the literature on the management of international M&As. By introducing two management localization and trustworthiness of expatriate managers into the model, the research deepens our knowledge of how to build trust toward the acquirer in cross-border M&As.

The purpose of this paper is to investigate the influence of capital structure changes by target firms on the outcome and ex post performance of firms targeted by proxy contests.

The influence is examined by using predictions of control‐driven model developed by Harris and Raviv and signaling theory of debt in capital structure.

The results are consistent with the predictions of both control‐driven model and signaling theory. Significant differences are found between two groups of target firms – management victory targets and dissident victory targets. Specifically: management victory targets feature proxy contests that are accompanied by leverage increasing changes in target firms' capital structure; the same group also realizes better long‐run stock performance compared to dissident victory targets; and the long‐run abnormal stock performance of management victory targets is significantly positively related to the increases in leverage in the capital structure during proxy contest period.

This paper is the first to directly address the relationship between leverage change and the outcome and long‐run performance of proxy contest targets, thus confirming both the defensive and the signaling role of debt on firm's capital structure decision.

Accounting research has emphasized target and bidder managers' incentives to manipulate earnings during corporate control contests. However, prior studies examining earnings management by takeover targets have obtained mixed results. Moreover, the existing evidence is mainly based on US data and hostile mergers and acquisitions (M&A) transactions. The purpose of this study is to examine earnings management by friendly takeover targets in the year preceding the deal announcement in Switzerland.

The paper examines earnings management practices of a sample of 50 Swiss firms that were targets of a friendly takeover proposition during the period 1990‐2002. Discretionary accruals are used as a measure of earnings management. It uses a matching approach and a cross‐sectional regression analysis to test the hypothesis of earnings management by takeover targets.

The paper expands and provides further international insights to the existing literature through the investigation of earnings management by takeover targets managers in a European setting and in a friendly corporate control environment.

These empirical findings document the existence of a significant downward earnings management during the year preceding the transaction. These results suggest that earnings management incentives may differ between negotiated friendly and hostile disciplinary transactions.

A corporate takeover (with major stake in equity) gives the acquirer the right to appoint majority of directors in the target’s board to control its management and policy decisions. When such acquisition is unsolicited and unwelcome, it becomes a “hostile takeover.” In such cases, the acquirer is said to be a “raider” and the raider’s management team may act under the influence of “hubris” implying that they seek to acquire the target for their own personal motives ignoring pure economic gains for the owners of both the companies. The hostile bidder makes all possible efforts to justify the takeover by paying handsome premium over the target’s fairly valued share price. In a hostile takeover, the target management or target promoters resist and fight tooth and nail against the raider to convey to the world that the bidder’s acts are not in the best interest of all their stakeholders. Any unsolicited and hostile takeover offer is generally viewed as oppression, domination or coercion by the bidding company against the target and its management. In a hostile bid, the existing target management always believes that whatever they do is in best interest of everyone. They feel complacent and assume that their standards of corporate governance are of highest order. Therefore, they are unwilling to succumb to the aggression and hostility of another corporate entity for takeover. The “so-called” victimized target resorts to all means to gain sympathy from peers, press, common shareholders, employees and general public. In today’s regulated market for corporate control, an intelligent hostile bidder would probably not acquire a business unless it has good strategic or financial reasons to do so. Hence, “stewardship” on the part of bidder’s management is very important in case of any hostile takeover. This chapter derives motivation from a three-and-half-decade-old abortive hostile takeover bid in India by Caparo Group of the UK and also the recently completed hostile takeover in India of a famous mid-sized information technology company, Mindtree by Larsen & Toubro, a major conglomerate. This research aims at developing a distinctive model to demonstrate that unsolicited hostile takeover may not be a good mechanism for a successful business combination.

The paper provides an overview of research published in the innovation and operations management (IOM) literature on 15 methods for cost management in new product development, and it provides a comparison to an earlier review of the management accounting (MA) literature (Wouters & Morales, 2014).

This structured literature search covers papers published in 23 journals in IOM in the period 1990–2014.

The search yielded a sample of 208 unique papers with 275 results (one paper could refer to multiple cost management methods). The top 3 methods are modular design, component commonality, and product platforms, with 115 results (42%) together. In the MA literature, these three methods accounted for 29%, but target costing was the most researched cost management method by far (26%). Simulation is the most frequently used research method in the IOM literature, whereas this was averagely used in the MA literature; qualitative studies were the most frequently used research method in the MA literature, whereas this was averagely used in the IOM literature. We found a lot of papers presenting practical approaches or decision models as a further development of a particular cost management method, which is a clear difference from the MA literature.

This review focused on the same cost management methods, and future research could also consider other cost management methods which are likely to be more important in the IOM literature compared to the MA literature. Future research could also investigate innovative cost management practices in more detail through longitudinal case studies.

This review of research on methods for cost management published outside the MA literature provides an overview for MA researchers. It highlights key differences between both literatures in their research of the same cost management methods.

This paper reviews the evolving literature on top management team effects in mergers and acquisitions (M&As). Existing research has focused on understanding why incumbent top managers depart at higher rates than normal following an acquisition and why high turnover rates have negative postacquisition performance effects. We explore two new areas of inquiry. First, we discuss the role of newly hired executives – executives hired after the acquisition. Our research indicates that executives who join target companies after an acquisition also depart more quickly than executives who join companies not previously involved in an acquisition. Acquisitions appear to create long-term instability in the target firm’s top management team – both incumbent and new-hire executives depart at higher rates than normal well into the future. Integration of the target firm often intensifies instability within the target company’s top management team. This instability affects performance and leads to further integration efforts as the firm attempts to improve performance. These additional integration activities, in turn, lead to even higher subsequent executive turnover. Second, we examine the topic of director turnover and propose a theoretical framework for understanding the relationship between acquisitions and director retention. Future research that considers the role of directors as well as executives may lead to deeper insight into the nature of turnover and integration effects in mergers and acquisitions.

Drawing from dynamic capability theory, this paper aims to examine the implementation of target cost management (TCM) in a non-Japanese environment.

Based on a case study at Company ABC, an automotive manufacturer in Malaysia, this paper investigates the differences in the TCM implementation process between Company ABC and companies operating in the Japanese business environment. The data were collected through in-depth interviews, direct observation and document reviews.

Using a single-case study approach, the findings show that although the case company follows similar fundamental steps of TCM as highlighted in the literature, it has modified the detail of the TCM steps to some extent to match with the company’s resources, business processes and strategic routines.

As the study used a single-case study approach on an automotive company, the results cannot be generalized in other settings. The findings give an insight into the TCM implementation in a developing country such as Malaysia. Better understanding of TCM as a business competitive tool may help to promote TCM application in other developing countries. The findings help new potential TCM companies in the same industry to mitigate and leverage the risk of failure in implementing TCM by modifying the TCM implementation process to suit their contextual environments.

This paper attempts to explain in depth the TCM implementation process in the case company and highlights how the dynamic capabilities can cause differences in TCM practices compared to those practiced in the Japanese context.