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This paper analyzes the benefits of a pre-deal purchasing price allocation (pre-deal PPA), which acquirers have come to integrate into an acquisition process to examine the effects of a potential acquisition on the acquirer’s financial statements. The authors take a management perspective and iestigate if the tool improves the comprehensiveness and quality of acquisition decisions. Based on an exploratory analysis using the results of semi-structured interviews with 24 accounting professionals from 19 Germany-based companies, the authors conduct a qualitative content analysis to identify the method’s benefits in the context of friendly acquisitions. The results suggest that, subject to cost-benefit considerations, a pre-deal PPA increases decision quality and leads to more comprehensive acquisition decisions. Furthermore, the paper proposes several best practice approaches to improve the implementation of a pre-deal PPA.
Purpose Research focussed on the scenario method has increasingly criticized the widely used intuitive logics (IL) approach to scenario development and introduced enhanced approaches, such as the backwards logic method (BLM) or the antifragile (AF) method, to overcome the restrictions associated with the IL approach. The BLM and the AF method have contributed to the further development of the scenario method by integrating backward reasoning and by increasing the method’s effectiveness for decision making. The purpose of this paper is to build on these ideas and introduce strategy scenarios as a further enhancement of the scenario method that directly applies the benefits of scenario-based planning to strategy development in corporations. Design/methodology/approach The authors argue that the existing methodologies do not fully integrate the benefits of scenario-based planning for strategic decision making and strategy development, as they mostly aim to develop macroenvironmental scenarios and test organizations’ existing strategies. Findings The paper suggests that changing the scope of scenario planning from environmental developments to the organization’s strategies themselves can further strengthen the method’s effectiveness for decision making. Originality/value The strategy scenario approach provides an enhanced approach to more comprehensively utilize the benefits of scenario-based reasoning for strategic decision making.
By integrating cognitive diversity into debiasing literature, this paper contributes towards opening the black box of executive judgment. Based on information processing theory we iestigate the role of cognitive diversity in strategic decision making. We apply a vignette-based experimental research design to examine the effect of cognitive diversity in teams on decision maker's illusion of control. The results of these experiments provide evidence for a positive influence of high cognitive diversity for debiasing judgment while similarly indicating no such effect for groups with low cognitive diversity. These findings suggest that group composition aspects can play an important role for improving judgment in decision making teams and open promising new avenues for studying debiasing in behavioral strategy research.
The impact of scenario-based strategic planning on strategic decision making: a cognitive analysis
(2011)
A copy of this doctoral thesis can be obtained on account from the HHL Library. Please send your request indicating the delivery address to: library(at)hhl.de._x000D_ For packaging and postage we request an advance payment of EUR 5.00 for deliveries within Germany or EUR 20.00 for international orders.
The integration of expert judgment is a fundamental pillar of most scenario planning processes. In particular, the systematic scanning of external expert opinions has been shown to be effective for the early detection of emerging threats and opportunities in an organization’s eironment. However, organizations tend to focus on internal advice more than on advice from external experts. This can be critical for organizations if it leads to an inertia in internal judgment, resulting in blind spots or a failure to see weak signals in the firm’s periphery. In this article, we introduce a structured framework for the collection and structuring of internal and external expert judgment. This so-called 360∘<math altimg="si1.gif" overflow="scroll"> </math>Stakeholder Feedback tool provides a structured and quantitative approach for the detection and discussion of blind spots and weak signals in scenario planning processes. Thus, it can contribute to a better and more holistic judgment in the strategic process. We demonstrate the methodology based on a case from the German construction industry, in which we aggregate and analyze expert judgments from different stakeholder groups regarding the future of the industry.