June'21

The IUP Journal of Business Strategy

Focus

The Covid-19 pandemic has disrupted the business environment in India and elsewhere. In such a scenario, many firms face a difficult future. Businesses are trying to cope with the pandemic-induced uncertainty by way of mergers. The second paper, "Reimagining Mergers in a Post-Pandemic World", discusses the prospects of mergers in post-Covid India. Section 233 of the Companies Act, 2013 provides for fast-track mergers which will help many companies successfully overcome the long-drawn-out bureaucratic processes. The authors, Ananya Srinath and Jishnu J R, explain how in 2016 five companies came together based on the provisions of this section of the Companies Act, 2013. The amalgamation helped the transferor company achieve economies of scale, eliminate multi-layer management structure, and accelerate the growth and development of respective businesses. A comparison with the Singapore Companies Act on fast track mergers is also presented. The authors conclude by suggesting how India could benchmark its laws with the Singapore Companies Act. These reforms will provide greater flexibility to Indian businesses in a post-pandemic world.

Successful businesses manage their supplier relationships efficiently. The benefits of managing these relationships are immense. The third paper, "An Analysis of the Challenges Facing SMEs in Managing Supplier Relationship", by Omary Swallehe, investigates how successful supplier relationships create competitive advantage for firms and how many firms lose the benefits due to several barriers. To empirically validate the proposition, the author investigates supplier relationships at 120 firms in Tanzania - 50 each in food processing and building construction sector and 20 from edible oil processing industry. The findings from the analysis indicate that firms face many challenges that are a result of interfirm differences, differences that arise from the supplier and buyers, and finally the barriers induced due to the size of the organization.

The fourth paper, "Leading in a VUCA World: Lessons from Covid-19", by Neeraj Singhal, looks at the challenges of leading in a VUCA world. The Corona pandemic has created unprecedented chaos and disruption and brought to the forefront the challenges business leaders confront in uncertain situations. The author discusses in brief how Covid-19 has brought volatility, uncertainty, complexity, and ambiguity in the business environment and suggests different ways in which leaders can look for solutions to the crisis. The Covid pandemic has impacted almost every sector of the economy across the world. Perhaps the hardest hit sector has been tourism. The research note, "Ethiopian Tourism Market: Battling the Pangs of Covid-19 Pandemic", by Pranab K Bhattacharya, discusses how Ethiopian tourism was impacted by the onset of Covid. Tourism in Ethiopia generates $2.9 bn for the economy each year, close to a million jobs and about 4.5% of the Gross Domestic Product (GDP), according to the World Bank. All this was disrupted due to the pandemic as international travelers postponed their plans. According to the author, tourism directly and indirectly influences a nation's GDP and sectors such as hotels, agriculture, medical, travel, construction, and real estate, to name a few. Analyzing anecdotal evidence from secondary sources, the author offers suggestions for resurrecting the tourism sector in Ethiopia.



- Venu Gopal Rao
Consulting Editor

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Post-M&A Innovation in Indian firms: An Empirical Investigation
50
Reimagining Mergers in a Post-Pandemic World
50
An Analysis of the Challenges Facing Smes in Managing Supplier Relationship
50
Leading in a VUCA World: Lessons from Covid-19
50
Ethiopian Tourism Market: Battling the Pangs of Covid-19 Pandemic
50
       
Contents : (June'21)

Post-M&A Innovation in Indian firms: An Empirical Investigation
Sandeep Yadav

he purpose of this study is to explore the effect of Mergers and Acquisitions (M&A) on firm innovation. The author examines a sample of 85 domestic M&A deals by Indian firms from 2000 to 2015. The analysis of firm-level data suggests that M&A influences the innovation activities of firms. The results show that the higher relative absorptive capacity of the acquirer increases post-deal innovation. The size of the acquirer firm positively moderates the relationship between relative absorptive capacity and post-deal innovation performance. The deal between firms in the same industry increases post-deal innovation. This study takes Research and Development (R&D) intensity (ratio of R&D expenditure to total sales) as a measure of firm innovation.


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Reimagining Mergers in a Post-Pandemic World
Ananya Srinath and Jishnu J R

Mergers and Acquisitions (M&As) are used as an instrument of exponential growth by companies. Companies choose to merge for various reasons: to avoid the long gestation period of projects, for access to new markets and technology, for better economies of scale, etc. The Indian Companies Act, 2013 has been the new revelation in the M&A regime in India. Mergers have become tools of business strategy to not only gain strength and expand customer base but also for eliminating competition and tax liabilities, and to cover the losses of one company against the profits of another.1 In 2016, an alternative to the lengthy and time-consuming process for mergers was introduced under Section 233 of the Act. This paper aims to understand the concept of fast-track mergers and compare the procedures in India and Singapore. The paper also aims to comprehend if fast-track mergers will help overcome a plausible recession.


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An Analysis of the Challenges Facing Smes in Managing Supplier Relationship
Omary Swallehe

he strategic benefits of managing suppliers' relationship cannot be over emphasized as more and more organizations have started to realize that they are becoming completely reliant on the suppliers in terms of innovative power, security of supply, corporate social responsibility, and cost saving. Managing strategic partnerships is the top agenda of many organizations both in developed and developing countries. Despite the strategic benefits of the SRM, not all companies are appreciating the value of building strong relationship with the suppliers. This study investigates the challenges facing organizations in the whole process of creating competitive advantages through building strong supplier relationship. The study investigated 120 small manufacturing organizations in the country in order to gain better understanding of the typical challenges that hinder the ability of the companies to create competitive advantage. The study found that many organizations surveyed encounter difficulties in imitating, developing, and managing the relationships. Out of the surveyed organizations, less than 20% are found to have business relationships with their suppliers, and that relationship is not even strong to guarantee success to both parties. Lack of trust among the suppliers and manufacturers has been cited by many as the main challenge facing organizations in managing supplier relationship. Managers in these organizations believe that creating partnerships with suppliers, is all about exposing the organizations to the competitors and losing ground in the market place. The other challenges mostly mentioned were corporate culture, business strategy, leadership skills, technical and functional competencies among others. By using exploratory factor analysis, the findings were categorized into supplier-buyer interface challenges, buyers own challenges, suppliers own challenges and the size of the organizations.


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Leading in a VUCA World: Lessons from Covid-19
Neeraj Singhal

The Wuhan Municipal Corporation reported the first case of coronavirus in China on December 31, 2019. After that, the virus spread across the globe. And as the pandemic caused by the coronavirus continues to spread, governments across the globe are having a difficult time in analyzing and predicting the course of the evolving situation. The first case of coronavirus in India was reported on January 30, 2020, post which the virus gradually spread its tentacles, forcing the government to declare a stringent lockdown on March 24, 2020. While the pandemic is a global problem, it is all the more severe in India given the large population base of 1.3 billion people. The other challenge is limited medical resources per capita population base. The leadership has to contain the spread of the virus and at the same time upgrade its medical infrastructure to deal with the disease. This paper is an effort to map leadership initiatives in the context of VUCA, an acronym which stands for Volatility, Uncertainty, Complexity and Ambiguity, to fight the coronavirus.


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Ethiopian Tourism Market: Battling the Pangs of Covid-19 Pandemic
Pranab K Bhattacharya


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Article Price : Rs.50