Jeffrey A. Krug

U.S. Joint Ventures in China: Motivation and Management of Political Risk

This article examines U.S. joint ventures in the People9s Republic of China. It focuses on the motives for these joint ventures and the American investors9 assessment and management of political risk. Information was collected in interviews with management personnel from eleven U. S. firms which had made direct investments in China by the fall of 1983. There are some significant differences for U. S. direct investments in China as contrasted to those in other countries, which have important implications for the establishment of future U.S. joint ventures in China.

The big exit: executive churn in the wake of M&As

Purpose – The purpose of this paper is to report the results of a ten‐year study on the effects of mergers and acquisitions (M&As) on target company executives and discusses the importance of managing leadership issues during the merger integration process.Design/methodology/approach – We followed the careers of more than 23,000 executives in over 1,000 target firms during a 17‐year period surrounding the acquisition. We then compared trends in executive turnover rates before and after the acquisition to understand the long‐term leadership effects of M&As.Findings – Target company executive teams are generally stable before they are acquired. Following acquisition, however, firms can expect to lose 21 percent or more of their executives each year – more than double that experienced in non‐merged firms – for at least ten years after the acquisition.Practical implications – Results show that M&As destroy whatever leadership stability target firms may have had prior to acquisition. The problem is to identify...

Brain Drain: Why Top Management Bolts After M&As

Purpose – This paper aims to analyzes merger, firm, and country characteristics that may explain the root causes of long‐term executive instability in target company top management teams.Design/methodology/approach – Mergers involve two different groups of executives – executives in place at the time of the acquisition (“incumbents”) and those brought into the target after the acquisition (“new‐hires”). In order to understand why many target companies experience long‐term instability in their top management teams, patterns of turnover in these two distinct groups were analyzed over a 17‐year period in 730 target companies.Findings – Analysis of the data revealed that a range of factors create conditions in target companies that lead to prolonged leadership instability. Different deal types such as tender offers, hostile takeovers, divestitures, and leveraged buyouts, the nature of merger negotiations, growth and profitability of the target company, headquarters location of the acquirer–whether foreign or ...