Why managers divest-Evidence from New Zealand's largest companies

Chief Executives from New Zealand's largest companies were surveyed to distinguish divesting and nondivesting companies, and to identify the relative importance of the factors and motives which led to the divestment of 208 business units in the period 1985 through 1990. The divesting companies...

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Bibliographic Details
Published in:Strategic management journal 1993-09, Vol.14 (6), p.479-484
Main Authors: Hamilton, Robert T., Chow, Yuen Kong
Format: Article
Language:English
Subjects:
Applied sciences
Asset management
Business strategies
Business structures
Capital investments
Capital shortages
Corporate growth
Corporate strategies
Decision making
Divestiture
Divestment
Divestments
Exact sciences and technology
Financial management
Firm modelling
Investment management companies
Large enterprises
Management techniques
managers
Market shortage
New Zealand
Operational research and scientific management
Operational research. Management science
Research Notes and Communications
Shortages
Studies
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Summary:Chief Executives from New Zealand's largest companies were surveyed to distinguish divesting and nondivesting companies, and to identify the relative importance of the factors and motives which led to the divestment of 208 business units in the period 1985 through 1990. The divesting companies were considerably larger and faster growing than nondivestors. The typical divestment was motivated by the need to convert unattractive assets into liquid form which could then be held to strengthen the balance sheet, or reinvested in either the core business or new areas.
ISSN:0143-2095
1097-0266
DOI:10.1002/smj.4250140606