Showing papers by "IE University published in 1998"

Strong Managers and Passive Institutional Investors in the UK

Abstract: To the opposite of most Continental European countries, the UK has had stringent rules on ownership disclosure for more than 50 years However, despite this, we show that the corporate governance system in the UK still needs be improved The way ownership of listed companies is concentrated in the hands of corporate directors and of passive institutional investors creates its own type of agency problems, ie high managerial discretion Furthermore, there is mounting evidence that hostile takeovers do not necessarily discipline badly performing managers

Insider Retention and Long-Run Performance in German and UK IPOs

Abstract: This paper is about ownership retention in German and UK IPOs, the determinants of ownership retention and its impact on IPO long-term performance. The first part of the paper studies ownership retention by pre-IPO shareholders over a period of six years following the flotation. Second, ownership retention six years after the flotation is linked to four factors, total risk, growth rate of assets, involvement of the founder, and the existence of non-voting shares. Third, the bad long-run performance of IPOs is correlated with ownership retention. The overall evidence suggests that the bad long-term performance of IPOs, compared to the stock market as a whole, cannot be explained by agency conflicts caused by the reduction in ownership by the original shareholders.

Need for Approval in Low-Context and High-Context Cultures: A Communications Approach to Cross-Cultural Ethics

Abstract: International business transactions are commonly subject to misunderstanding with respect to truth telling and promise keeping. This paper argues that cultural differences in contexting contribute greatly to these misunderstandings. This study finds support for the hypothesis that the individual-level characteristic of need for approval is related to contexting at the cultural level and to culturally valued communication outcomes. Spanish, Mexican, and U.S. MBAs had significantly different mean scores on the social desirability scale. This study also finds no systematic differences in attitudes toward truth telling and promise keeping in business based on culture. Theory-based implications for research and business practice are discussed.

Managing manufacturing in an economy in transition: spain's challenges and responses

Abstract: A number of European firms find themselves at the vortex of economic, market and technological forces that pull at them in a variety of directions. The twin phenomena of Western European economic integration and Eastern European socioeconomic transformation are changing the economic landscape within which firms must compete and succeed. These creative and regenerative processes are also painful and, at least initially, quite upsetting and destructive. The 20–50% plummeting of Eastern European per capita GDPs and the rise of Western European unemployment to the 10–20% level are clear indications of the current upheaval. Manufacturing is, perhaps, the economic sector most seriously affected by the forces of globalisation and integration, as shown by the ongoing dramatic downsizing of ‘traditional’ industries such as steel, textiles, and automotives. Manufacturing is also of enormous significance since it lies at the core and foundation of any industrialised and/or post-industrial society (Dertouzos, 1989). Clearly, globalisation and integration offer manufacturing both challenges and opportunities, which must be diagnosed and addressed (Kennedy, 1993).