Essays on strategic interactions, corporate structures and behavioral accounting

Abstract

Enhancing the firm value is one of the main goals of business strategies. These strategies often include strategic modifications of corporate structures by using the latest findings both from practice and science. Apart from mergers and acquisitions (M&As) as the obvious corporate restructuring, trends regarding changes in the corporate structures evolve every now and then. However, even if these trends are popular, they are not necessarily well fitting for each firm. To use the full potential of these corporate restructurings, the employees' incentives and strategic decision bases have to be considered in an appropriate manner. This cumulative work focuses on strategic interactions and the choice of a value-enhancing change of the corporate structure dependent on different underlying conditions. It is examined under which conditions the trends regarding changes of corporate structures are as beneficial as they are claimed to be. In two of the three papers, non-monetary utility aspects or other issues from behavioral accounting are part of the analysis. In particular, the first essay analyzes whether and if so, under which conditions a self-organized team formation as a part of the 'New Work Style' is beneficial for firms under consideration of psychological proximity among employees. Teams can be formed either by the employer or by the employees, the latter one is representing self-organized team formation. If psychological proximity is considered, it can shape the teams' performances and hence, the team formation decision. The second essay analyzes whether the trend of implementing a Center of Excellence (CoE) is as beneficial as it is claimed to be, in particular with regard to expected profits, effort and compliance issues. A CoE is a centralized business unit which adopts and pools processes that are needed by more than one division. Finally, the third essay examines whether a retention bonus can mitigate the negative effect of a merger announcement on the voluntary turnover rate and thus, the firm value. As the employees' turnover decisions are mainly shaped by their expectations to be retained in the merged firm, the impact of one decision-maker who is biased towards retaining the own employees on their voluntary turnover rate and its interaction with a retention bonus is the main part of the analysis.