Cases in Dynamic Finance: Mergers, and Restructuring
- Book Review,
by J. Fred Fred Weston
From the Back Cover
From the script of Professor J. Fred Weston comes an important First Edition case book on firms in the new economic environment. The cases take a dynamic view of how firms adapt and evolve in their changing and challenging environments. The real-life cases in this volume include successes and failures and overlap the traditional areas of business finance. The twenty-four studies include MCI, Staples/Office Depot, WorldCom/Sprint AOL/Time Warner, the Defense Industry, Daimler/Chrysler, GM/Toyota, Dow/Union Carbide, and the AT&T Restructuring. An Instructor's Manual, written by the author, is available to download from the Finance website at www.prenhall.com or go to www.prenhall.com/weston. You can order a custom version of Cases in Dynamic Finance, Mergers and Restructuring through Pearson Custom Publishing., For more information on this, contact your local Prentice Hall representative: or visit the custom site at www.pearsoncustom.com.
About the Author
J. Fred Weston is Professor Emeritus Recalled of Managerial Economics and Finance at the John E. Anderson Graduate School of Management at UCLA. He received his Ph.D. degree from the University of Chicago in 1948. He has published 31 books, 147 journal articles, and chaired 32 doctoral dissertations. Since 1968 he has been Director of the UCLA Research Program on Takeovers and Restructuring. Dr. Weston has served as President of the American Finance Association, President of the Western Economic Association, President of the Financial Management Association, and as a member of the American Economic Association U.S. Census Advisory Committee. In 1978, he was selected as one of five outstanding teachers on the UCLA campus. In 1994, he received the Dean's Award for Outstanding Instruction in the Anderson School at UCLA. He has been an associate editor on a number of journals. He has been selected as a Fellow of the American Finance Association, of the Financial Management Association, and of the National Association of Business Economists. Illustrative publications: Weston, Siu, and Johnson, Takeovers, Restructuring, and Corporate Governance, Third Edition, Prentice Hall, 2000; Weston and Copeland, Managerial Finance, Ninth Edition, 1998 Update; Copeland and Weston, Financial Theory and Corporate Policy, Third Edition, Addison Wesley, 1988; Weston, "Strategy and Business Economics," Business Economics, April 1989; Weston, Acquisitions Handbook, 1993; Chen, Weston, and Altman, "Financial Distress and Restructuring Models," Financial Management, Summer 1995; Weston and Chiu, "Growth Strategies in the Food Industry," Business Economics, January 1996; Weston and Siu, "Restructuring in the U.S. Oil Industry" (1996), and Weston, Johnson, and Siu, "Mergers and Restructuring in the World Oil Industry" (1999), Journal of Energy Finance & Development; Weston, Jawien, and Levitas, "Restructuring and Its Implications for Business Economics" (January 1998), and Weston, Johnson, and Siu, "M&As in the Evolution of the Global Chemical Industry" (October 1999) MBusiness Economics. He has been a consultant to business firms and governments on financial and economic policies since the early 1950's. Professor Weston has held professional consulting assignments with Bank of America, Lockheed, Transmerica, Boeing, Hughes Aircraft, Crocker Bank, Reading Railroad, Litton, General Electric, Westinghouse, Quaker Oats, Sun Harbor Tuna, Eli Lilly Co., Hoffman-LaRoche, 3M Company, General Motors, GAO, IRS, U.S. Department of Commerce-Bureau of the Census, Shoenfeld Industries, Chevron, Morgan Stanley & Co., and AT&T.
Excerpt. © Reprinted by permission. All rights reserved.
Fundamental change forces have impacted the world economy in recent decades. The pace of technological change has accelerated. The costs of communication and transportation have been so greatly reduced that markets have become global. While opportunities have expanded, the forms, sources, and intensity of competition have also grown. The strong, new change forces have had major impacts. The technological requirements for firms have increased. As the roles of computers and the Internet have expanded, every firm has been impacted by increased requirements for information technology systems. The requirements for human capital inputs have grown relative to physical assets. The knowledge and organizational capital components of firm value have increased. Growth opportunities among product areas are unequal. New industries have been created. The pace of product introductions has accelerated. Economic activity has shifted from manufacturing to services of increasing sophistication. Distribution and marketing methods have changed, particularly by the impacts of the Internet. The value chain has deconstructed in the sense that more activities are performed by specialist firms. Forces for vertical integration have diminished in some areas, but increased in others. Changes in the organization of industries have taken place. Industry boundaries have become increasingly blurred. The forms and number of competitors have been increasing. These new change forces have interacted with traditional ones. In an enterprise system with many independent decision units, attractive growth areas stimulate multiple firms and expanding investments. Growth and profitability areas expand and decline. Investments in plant and equipment and inventories result in overcapacity and economic adjustment periods. Business fluctuations of varying lengths and severity affect all the nations of the world economy. Financial markets continue to experience overshoots both on the upside and the downside. The traditional models in both microeconomics and finance have been timeless or static in their orientation. But with the increased pace of change and economic turbulence, the adjustment processes that firms are required to continuously engage in need to be studied and their implications analyzed. This casebook seeks to focus on the adjustment processes of firms in increasingly dynamic environments. The cases in this compilation include firms that have succeeded and those that have floundered in the new environment. The content of the cases overlap the traditional areas of micro-economics, business finance, mergers and takeovers, restructuring, and corporate governance. The title, Dynamic Finance, seeks to encompass multiple areas. A convergence of disciplines is emerging. This casebook seeks to develop material that will illuminate general concepts and principles. The cases are of unequal lengths depending on the subject matter. The longer cases lend themselves to the use of role-playing in which teams can represent different points of view and interest groups. Most of the cases involve actual companies so can be continuously updated for analysis and discussions. We find it useful to obtain multiple analyst reports with their outlook discussion to add new issues and different orientations for further discussion and analysis. We plan to continue to add new cases as more companies adjust to the changing environment. They will be available in the Pearson Business Resources Case Series and periodically in compilations. (Please view information on this program at www.pearsoncustom.com). The availability of individual cases will enable users to select different compilations. Since this will be a continuing activity, any comments or suggestions will be welcomed. Please send them to the corresponding author at: J. Fred Weston The Anderson School at UCLA 258 Tavistock Ave. Los Angeles, CA 90049-3229 Tel. (310) 472-5110 Fax. (310) 472-9471 Email: jweston@anderson.ucla.edu Web site: http://www.anderson.ucla.edu/faculty/john.weston
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