Privatization of State Owned Enterprises Research Proposal

Privatization of State Owned Enterprises - Research Proposal ExampleGovernments in create countries (e.g. Britain and Japan) started privatizing SOEs in the early 1980s by the late 1980s it had become apparent that a privatization revolution would sweep the world (Young, 1987). While the bulk of privatizations during the past decade occurred in developed countries, in recent years the emphasis has shifted to developing countries (The Economist, 1993). In these countries, capital marts can hardly absorb the extended amounts of privatized equity, and governments are offering to sell SOEs to western multinationals as strategic owners (The Economist, 1993 Ramamurti, 1992). In addition, these countries look to western multinational openings for managerial and technical know-how. This trend creates possibilities for growth and entry into countries whose economies are currently expanding faster than most developed economies. While privatization in the 1980s created opportunities for por tfolio investments, the 1990s also promise the control of privatized firms through mergers and encyclopaedisms (Freudenberg and Bird, 1991 Nankani, 1990 Ramamurti, 1992). For these reasons, privatization is considered here to be an international management concern.Empirical research and theory on direct investment into former SOEs, unfortunately, is scant. Economists mainly agree that reducing government ownership of companies improves the macro- implementation of an economy, and they also expect that a competitive environment and market discipline should increase the efficiency of the privatized firm (Donahue, 1989 Hutchinson, 1991 Ramamurti, 1992 Vickers and Yarrow, 1988). Empirical research on this latter point, however, has yielded conflicting results (Cook and Kirkpatrick, 1988 Hutchinson, 1991 Parker and Hartley, 1991). strategic management research considering the performance of the SOE after it is acquired by a private firm is missing entirely. No mergers and acquisitions work has yet considered the purchase of SOEs, nor have researchers examined the conceptual relationship between traditional mergers and the acquisition of an enterprise from the government. On the one hand, the public/private shift inherent in privatization might imply that acquisition processes work differently for privately and publicly owned firms. The strategy, structure, and culture of the public organization can be expected to differ significantly from those of private firms because of the often special missions of SOEs and distinct environments in which they may be operating (Aharoni, 1986). Since post-acquisition integration processes are discoverd by the historic conditions of the merging firms (Nahavandi and Malekzadeh, 1988 Shrivastava, 1986), these differences may crucially captivate the success of a merger between a private firm and a newly privatized SOE. The pre-acquisition conditions of the keister also influence performance (Datta et al., 1992), and thus the dist inctive contingencies of the SOE can be expected to affect post-acquisition performance as well. Furthermore, the objectives of a government selling an SOE are as much political -- that is, catering to unique(predicate) stakeholder groups, for instance current employees of the SOE -- as economic, a fact that should significantly affect the negotiations and may also determine the post-privatization performance of the former SOE. Only recently has the strategic management literature begun to examine the implications of government polity for