Workforce reductions and post-acquisition operating performance: the role of corporate governance
Workforce reductions and post-acquisition operating performance: the role of corporate governance
This paper examines whether corporate governance mechanisms influence the association between workforce reductions and post-acquisition operating performance. Using UK-based acquisitions, it is found that there is a negative relationship between employment reductions and post-acquisition operating performance. However, the results show that this negative association becomes positive when the board has a substantial equity ownership. This suggests acquirers with higher levels of board ownership make better quality layoff decisions and, thereby, achieve operating performance improvement subsequent to workforce reductions. The results also indicate that larger board size and greater board independence decrease the negative effect of acquisition-related workforce reductions on subsequent operating performance. Further, our results show that CEO duality increases the negative relationship between employment reductions and post-acquisition operating performance. Overall, the results suggest that corporate governance plays an important role in understanding the performance effect of acquisition-related workforce reductions.
109-120
Malikov, Kamran
c06bf7c0-0e21-4eda-9be3-4d85e9965d34
Demirbag, Mehmet
8dddecf7-165e-4248-84bb-c9750e252922
Kuvandikov, Azimjon
202c8ca0-e9f5-4039-a0b4-3d5e5bf7192e
Manson, Stuart
7001c760-7334-49e4-86d2-5bce4658b34d
11 September 2020
Malikov, Kamran
c06bf7c0-0e21-4eda-9be3-4d85e9965d34
Demirbag, Mehmet
8dddecf7-165e-4248-84bb-c9750e252922
Kuvandikov, Azimjon
202c8ca0-e9f5-4039-a0b4-3d5e5bf7192e
Manson, Stuart
7001c760-7334-49e4-86d2-5bce4658b34d
Malikov, Kamran, Demirbag, Mehmet, Kuvandikov, Azimjon and Manson, Stuart
(2020)
Workforce reductions and post-acquisition operating performance: the role of corporate governance.
Journal of Business Research, 122, .
(doi:10.1016/j.jbusres.2020.08.042).
Abstract
This paper examines whether corporate governance mechanisms influence the association between workforce reductions and post-acquisition operating performance. Using UK-based acquisitions, it is found that there is a negative relationship between employment reductions and post-acquisition operating performance. However, the results show that this negative association becomes positive when the board has a substantial equity ownership. This suggests acquirers with higher levels of board ownership make better quality layoff decisions and, thereby, achieve operating performance improvement subsequent to workforce reductions. The results also indicate that larger board size and greater board independence decrease the negative effect of acquisition-related workforce reductions on subsequent operating performance. Further, our results show that CEO duality increases the negative relationship between employment reductions and post-acquisition operating performance. Overall, the results suggest that corporate governance plays an important role in understanding the performance effect of acquisition-related workforce reductions.
Text
JBR paper - Accepted 25 Aug 2020
- Accepted Manuscript
More information
Accepted/In Press date: 25 August 2020
e-pub ahead of print date: 11 September 2020
Published date: 11 September 2020
Identifiers
Local EPrints ID: 485742
URI: http://eprints.soton.ac.uk/id/eprint/485742
ISSN: 0148-2963
PURE UUID: a1ce085a-96ec-42d5-9c49-91b3c112e318
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Date deposited: 18 Dec 2023 20:29
Last modified: 17 Mar 2024 06:28
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Contributors
Author:
Kamran Malikov
Author:
Mehmet Demirbag
Author:
Azimjon Kuvandikov
Author:
Stuart Manson
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