Session Details: Session 1086

Alternative Views of Value Creation

Track F

Date: Monday, October 13, 2008

 

Time: 15:30 – 16:45

Common Ground

Room: Salon 4


Facilitator:
Igor Filatotchev, City University London

Title: Antecedents and Consequences of Venture Capital Syndication

Authors

  • Violetta Gerasymenko, New University of Lisbon

Abstract: Syndication has become a widely used investment strategy for venture capital funds. Meanwhile its drivers and its impact on the funds’ performance remains poorly understood. The present study draws on a large and unique dataset of the characteristics of 57741 investment rounds and the performance of 1104 venture capital funds. It first analyses the antecedents of syndication at the initial and subsequent stages of a venture’s life. We identify funds’ investment experience, syndication experience and financial resources as important predictors of syndication. We then explore the performance impact of syndication on venture capital fund performance and find that funds with a higher proportion of syndicated deals as well as funds with an early-stage focus syndicating at late-stage rounds perform better.

Title: Creating Corporate Value from Unsuspected Places

Authors

  • Adrian Caldart, AESE School of Management and Business
  • J Ignacio Canales, University of Glasgow

Abstract: This paper explores whether corporate value can be created from initiatives not led by the corporate level of the firm. We studied strategic initiatives leading to corporate value creation that took place across three different firms. We found that, in addition to the “classic” sources of corporate value creation--corporate level initiatives or business level proposals grounded on corporate requirements--all firms showed initiatives that emerged spontaneously from the business units. These findings have two implications. First, that work associating corporate value creation to actions led by the corporate level of the firm fail to provide a complete picture of the phenomenon of corporate value creation. Second, firms can only develop these corporate value creation initiatives through the development of “liaison devices” among the business units.

Title: External Market Interaction of Internal Service Operations: A Modularity Theory Perspective Examining the Effect of Service Type

Authors

  • Norbert Bach, Ilmenau University of Technology
  • Torsten Biemann, Jacobs University Bremen

Abstract: This paper studies a phenomenon whose existence contradicts theoretical explanations of make-or-buy decisions: internal service units that serve both, internal and external customers. Building on and extending the literature on vertical architecture and concurrent sourcing, we consider effects at the industry, firm, and organizational unit level. Modularity theory explains successful market interaction of internal service operations through the degree of modularity of services. Hence, some service types are better suited for market interaction than others. Empirically, comparing a sample of 236 internal service units that also compete externally to a control group of 550 purely internal service operations shows the expected effect of service type on market interaction.

Title: How To Explain The Variance in The Allocation Of Ownership Rights In Firms?

Authors

  • Christian Weiss, European Business School

Abstract: There is considerable variance among firms with respect to the allocation of ownership rights. In this paper, we review existing literature on the determinants of firm’s ownership structures. Drawing on the work of Hansmann (1996), we propose a framework according to which three groups of antecedents explain the observed variance, namely firm-specific, industry-specific, and country-specific factors. Our review of the existing research shows that many studies have provided convincing evidence for the influence of firm-specific drivers of ownership allocation. In contrast, relatively little research has been produced on the effects of industry- and country-specific factors on central dimensions of ownership allocation, such as the internal versus the external allocation of ownership rights. We argue that future research that addresses these ‘hidden spots’ in our understanding of the determinants of ownership allocation is likely to have the highest marginal value.

Title: Is One Better than Many? Processes of Corporate Value Creation

Authors

  • Véronique Ambrosini, Monash University
  • Cliff Bowman, Cranfield University
  • Richard Schoenberg, Cranfield University

Abstract: In this paper we ask whether corporations can successfully deploy several types of dynamic capabilities or value creation process logics simultaneously, or whether, using a configuration argument, as different resource creation paths require different strategies and structures they may only be successful if they adhere to a single logic. We attempt an answer by reporting on an exploratory empirical study of dynamic capability configurations within a sample of UK acquisitions. The results give support to the conceptual argument that a corporation should only follow one value creation logic, and as such that the configurations are mutually exclusive. The paper concludes with managerial implications regarding the relative underperformance of corporations that follow multiple value creation logics.

Title: Understanding the Buyers’ Role in Private Equity Returns: The Influence of Skills, Strategy and Experience

Authors

  • Oliver Gottschalg, HEC-Paris
  • Mike Wright, Imperial College London

Abstract: We examine to what extent the characteristics of private equity buyers influence investment performance using a unique and proprietary hand-collected dataset comprising 901 US private equity backed buyout investments derived from the audited track records of private equity firms reported in Private Placement Memoranda (PPMs). We find that the rate of return on invested equity increases in a convex (u-shaped) relationship with the experience the private equity firm has with private equity investing, increases linearly with the level of strategic involvement of the private equity firm and increases linearly with the expertise of the private equity firm.

All Sessions in Track F...

Mon: 11:15 – 12:30
Session 1089: Make, Ally or Buy
Session 1096: Executive Compensation
Mon: 15:30 – 16:45
Session 1086: Alternative Views of Value Creation
Session 1090: CEO Pay
Session 1107: Executive and External Forces in Strategy
Mon: 17:00 – 18:15
Session 1091: Impression Management
Session 1098: Social Networks
Tue: 11:15 – 12:30
Session 1093: Succesion and Team Dynamics
Session 1103: Social and Human Capital
Tue: 14:30 – 15:45
Session 1095: Diversification
Session 1105: Governance Perspectives
Wed: 10:00 – 11:15
Session 1104: Managing Alliance Relationships
Session 1106: New Corporate Strategy Perspectives
Wed: 11:30 – 12:45
Session 1088: Acquisitive Growth Strategies
Session 1092: Dynamic Strategies and Resources


Strategic Management Society

Cologne Conference