The Effects of Mergers and Acquisitions: Evidence From China by Jiayin Huang, Article Critique Example

Introduction

Jiayin Huang’s (201) study on the Effects of Mergers and Acquisitions: Evidence from China specifically indicates a more refined understanding on what mergers and acquisitions are all about and how these procedures are handled in the country. This critique is further pursued to make an indicative understanding on how Huang presents her point in showing that the western way of business procedures should not be considered equal to the pattern of business that the Chinese community recognizes. Hence, knowing the most comprehensive issues of development that the study of Huang presents is expected to make a definite course of understanding that business researchers need to know of especially in consideration with the operations of China with regards M&A’s. From this study, it could be analyzed that China is presented as a separately defined tiger of the Asian region even though it does have specific roots from its traditions and cultures even at the point of considering business transactions.

China is noted to be a very traditional country. Rooted in their culture as well as spiritual beliefs, the Chinese society does not immediately accept everything that comes along from the west especially when it comes to the ideal procedures from which business organizations operate. China is seemingly very definite about the way it allows other regions of the world affect its operational approaches specifically when it comes to the manner by which they handle business. In the study of Jiayin Huang, a closer understanding with regards the culture of China and how its business operators want to intensify the process by which they incur mergers and acquisitions as part of the aim of progressing forward towards the evident way of improving the way they operate towards globalization.

To understand the development of the Chinese market in facing global impact of the Chinese business, it could be noted that this study is dedicated towards the course by which operational considerations in the industries of China is observed to move forward (Huang, 2010, 29). In the discussion that follows, an indicative understanding of how the study of Huang points out the differences and the similarities of the Chinese mergers and acquisitions culture compared to that of the western culture on the same track of business operation shall be presented.

Research Question or Statement of the Problem

In line with the purpose of the study comes a definite identification of what is specifically focused upon in the research. The questions investigated upon concerns three particular issues. One is directed towards identifying the classical ways by which Chinese businessmen intend to manifest a great impact on how they acquire and merge operators with neighboring business and even across their borders towards foreign investors. Second is regarding the different factors that affect the value of M&As that the country recognizes. And third is regarding the wealth distribution between partnering businesses in the industry.

These questions could be deemed as effective and relatively connected to the primary purpose of the study to make a correlative indication on how a developing country recognizes the worth of their tradition in line with the path towards globalization that the nation hopes to embrace. In definition of the desire of the researcher to find out how M&A’s are handled in the country, these particular problems are valuable for addressing the issues that are concerned with the operation of the industries in relative connection to the global development of China’s commercial growth.

Theoretical or Conceptual Foundation

While there are different theories and disciplines that are related to the M&A issues in the aspect of business development, the researcher of this study intended to concentrate on three particular practices which include the theory of agency motive, the cash flow theory and the hubris hypothesis. Pointing out how these particular theories affect the modern ways of handling business in China, Huang was able to create a good picture on how each theory works in responding to the values of the parties involved in the M&A process. Relevantly defining the course of development, it could be assumed that modern industries in China are beginning to embrace the modern way of handling the need for creating a well-manifested definition good business. Nonetheless, it should not be forgotten that while the country embraces an essence of modernity, the people still hold strong consideration on how their culture and spiritual bearings are considered to be a part of their partnerships with other business owners. In line with this, the defined assumptions of theories and disciplines recognized in this study have been well presented by the researcher as she tries to connect each aspect of operation in line with the characteristics and culture of the country’s people. The connection of such elements has made this study a more focused and specific pattern that businesses abroad aiming to create partnerships with Chinese business entities could use.

Relevance of Literature to Research Question

Considering the concentration of the topics that the literature review section has discussed, it could be analyzed that the parallel connection of this section with that of the need to respond to the questions defined in each pattern of development is definitely relevant. While the questions hope to investigate on how much benefit the partners of M&A procedures in China get from the said business approach and what factors affect the said benefits, the literature review was able to give a practically supporting source of understanding that makes the said presentation more definitive and implicative in estimating the different elements that make M&A operations successful and well-endowed towards business growth and development. Not only that, it could be realized as well that the review of the literary sources in the study makes a considerable indication on how each question is defined as a source of the study’s strong-willed desire to point out how the people’s culture and the aspect of modern global assumption of business growth affect the pattern by which modern business organizations in China thrive for survival and winning point in the field of competition. The literary selection that the author chose for the discussion of the theories and other business practices related to what is being discussed in the paper could be considered effective as it does define the manner by which the Chinese business operations differ from that of the world. Utilizing scholarly forms of works, Huang was able to correlatively connect her resources with the hypothesis she is trying to prove in the research.  However, it could be noted how the approach of presentation of the literary sources could have been further improved through the use of the Delphi method (Hilber, et al, 2009) which includes the connective communication between the panel of experts. Sourcing out some expert comments from the literature collected by the researcher, this approach is expected to create a more definitive path that could identify the process of development that the researcher wants to incur in collaboratively using the options of research noted for this study.

Literature Synthesis

Imposing on how unique the Chinese Capital Market is, the literary sources were practically synthesized altogether hence imposing on how much evident the course of development is in the country. Realized still be the sleeping giant being awoken from its rest, China is emerging as a strong economy that is characterized by the different business operations that its people and its industries are beginning to embrace. The definite course by which these operations have imposed a course of a well specified structure of business operation of the country’s development is presented well through the literature review section and improved through the synthesis used by the researcher to connect the data that was found through on the sources that have been collected. While imposing that other studies have failed to manifest a clear connection between the Chinese and the Western ways of business, the literature used in this research is able to correlatively connect both through pointing out particular comparisons and shelling out the reasons behind the differences of the said business cultures applied in China.

Discussion

From this point, it could be observed how effective Huang’s perceptions were in refining the understanding that the public has in connection with the indication of how China’s Capital Market operates. The initiative from which the market emerges specifically notes how important cooperative relationship between elements that impact M&A business approaches note the success of any business partnerships established on the grounds of imposing industrial growth in China. With the investigation of the underlying motives of the Chinese corporate institutions as they engage in the share and ownership structure of business M&A’s, this study was able to implicate a more directive indication on how the Chinese industry operates and how it dies allow a bit of the western culture to affect its course of business operations. The summary presented by Huang was effective enough in presenting how the Chinese business culture tries to come up with viable operations that could help them become more endowed in redefining their course of M&A culture, nonetheless, this could have been further improved if Huang made indicative presentations not only on the motives of the mergers but also on the resulting factors that such motives impose on the business partnerships created.

Conclusion

The process from which China develops into the awoken tiger economy of Asia is still being gradually recognized around the globe. Taking everything at a considerable pace, China is insisted to be among the most comprehensive countries that have considered M&A as one of its strengths especially in defining its empire of business organizations that are not only taking over the country but all over the globe as well. Recognizing their culture and spiritual beliefs and how these factors affect the capital market of China makes Huang’s study a well defined indication of what China is all about and what it is facing as the world nears its global peak of industrial and commercial development. The structure of this study in presenting what is needed for directive understanding on how the Chinese business community operates with M&A’s is specifically indicative of what motives stirs up the mergers hence imposing on what culture they follow in the aspect of developing partnerships in business. The recommendations for further studies that the researcher indicates specifically creates a notable understanding that as of today, China still continues to embrace development and is thus expected to make specific changes along the way hence creating indicative options of considering their own paths of realizing the worth of M&A’s for their primary business benefits. Notably, the careful presentation of facts by the author of this research makes the article a reliable source dedicated to help other researches that are aiming to define the Chinese business culture further especially in consideration with the existence of M&A’s.

Reference:

Huang, Jiayin. (2010). The Effects of Mergers and Acquisitions: Evidence from China. The John Molson School of Business. ProQuest Dissertations and Theses.

Xiao, Zhixing. (2011). The Problem with China’s Business Culture. http://blogs.hbr.org/cs/2011/10/the_problem_with_chinas_busine.html. (Retrieved on November 17, 2011).

World Business Culture. (2011). Doing Business in China. http://www.worldbusinessculture.com/Business-in-China.html. (Retrieved on November 17, 2011).

Hilbert, Martin, Ian Miles and Julia Othmer. (2009). “Foresight tools for participative policy-making in inter-governmental processes in developing countries: Lessons learned from the eLAC Policy Priorities Delphi“. Technological Forecasting and Social Change, Volume 76, Issue 7. Pages 880-896, Volume 15 Number 2.