StudentShare solutions
Triangle menu

Do Divestitures Have PositiveWealth Effects - Literature review Example

Nobody downloaded yet
Therefore, it can be said that a concept of divestiture is the opposite of an investment. The concept of divestiture is very much different from the concept of personal finance. Under the concept of personal finance, the investors sell out their business shares so as to meet their personal objectives. The major scope of a divestiture is that it allows the concentration of business resources in the market, and this process makes the business more profitable. This literature review tends to evaluate the positive wealth effects of divestitures. Motives behind divestitures Evidently, divestiture processes have been gradually increasing since 1990s. According to Kiymaz (2006), the gradually increasing divestiture can be clearly attributed to widespread corporate restructuring activities. The Author points out that the volume of divestitures has increased since 2,057 in 1993 to 3,134 in 1998. Kiymaz also argues that divestitures are the outcomes of a firm’s interest to create and preserve its shareholder wealth and it does not always symbolize the failure of a firm. A divestiture effectively refreshes a business organization and it assists the firm to enter the next phase of growth. The ultimate objective of every business firm is its further expansion and thereby increased profitability. A running business may have thorough knowledge regarding its key areas of strengths and weaknesses. Hence, an organization normally intends to restructure its strategies and concepts in order to address its weaker business areas and thereby focus more on potential growth sectors. In the opinion of Kiymaz (2006), spin offs and sell offs are the two effective techniques for a successful divestiture. Under the spin off methods, a company distributes all the common stocks to its existing shareholders with intent to create a separate publicly traded company. The author asserts that the divested asset is sold to another firm according to the concept of sell off. A spin off does not release its assets out of the company boundaries; instead, it retains within the hands of its shareholders. In contrast, a sell off constitutes complete remolding of the organizational structure and it includes an absolute disposal of some of its assets. However, retirement of succession planning is one of the major elements that influence a firm to adopt the techniques of divestitures. Rationalizing the number of shareholders is another motive behind divestiture strategies. Obviously, every shareholder of a firm would not be able to raise additional funds in times of contingencies. Moreover, every firm likes to retain potential shareholders because only they can contribute to the expansion of the company. The concept of divestiture enables the company to explore its potential shareholders. Colak and Whited (n.d.) claim that conglomerate invest efficiency play a vital role in determining the degree of growth of conglomerates. The authors add that a divestiture can effectively add to the improvement of conglomerate investment efficiency. Therefore, dismantling conglomerates becomes a strong motive behind a divestiture. Similarly, a firm may have earned number of business entities by the way of acquisitions. It is often seen that the acquisition strategies adopted by firms become incorrect and thereby such firms are compelled to discard their acquisitions. Under such ...Show more
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Do Divestitures Have PositiveWealth Effects Literature review”, n.d.)
Retrieved from https://studentshare.net/gender-sexual-studies/24875-do-divestitures-have-positivewealth-effects
(Do Divestitures Have PositiveWealth Effects Literature Review)
https://studentshare.net/gender-sexual-studies/24875-do-divestitures-have-positivewealth-effects.
“Do Divestitures Have PositiveWealth Effects Literature Review”, n.d. https://studentshare.net/gender-sexual-studies/24875-do-divestitures-have-positivewealth-effects.
  • Cited: 0 times

Summary

Do Divestiture have Positive Wealth Effects? Literature Review (College/University) Do Divestiture have Positive Wealth Effects? Literature Review Introduction In economics, divestiture or divestment represents partial or full disposal of an investment or asset by way of sale, closure, exchange, or bankruptcy…
Do Divestitures Have PositiveWealth Effects Literature review
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the literature review on your topic
"Do Divestitures Have PositiveWealth Effects Literature review"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Literature review
There may also be cases of dismissals, resignations and retirements that will all call for the need to recruit and employ new workers. Even though recruitment and selection are one of the very usual and inevitable corporate practices, it is very important to attend to them with great caution and in by following good recruitment and selection processes that would ensure the company does not suffer the consequences of poor recruitment.
12 pages (3000 words) Literature review
Literature review
Hence, in this regard, both the private and the public sector have devoted considerable attention to the notion of customer satisfaction, which is a rudimentary basic in the customer-company relationship. Naturally, in order to increase the awareness about this concept, administrators have increasingly encouraged their staff to gain knowledge by studying and researching on this phenomenon of customer satisfaction for the welfare and growth of the organization.
10 pages (2500 words) Literature review
Literature review
Over the years, the landscape and the modus operandi of the business organizations have changed. This change has affected the job descriptions of the managers also. Now, managers are not treated as just employees with power; rather, they are treated as entrepreneurs with responsibilities.
4 pages (1000 words) Literature review
Literature Review
Generally speaking, online businesses provide a number of considerable benefits to business owners, as well as to customers. Online retailers are able to increase customer trust through efficient response and better customer relationship management (Hoffman, Novak & Peralta 1999, p.
5 pages (1250 words) Literature review
Literature review
In China, there are many types of informal financers such as, Rotating Savings and Credit Associations (lending cooperatives formed by members of the society) like, bahui, hehui and yaohui, private lending individuals, lending enterprises and pawn brokers, who extend credit in exchange of non-traditional collaterals such as, jewellery and personal belongings.
8 pages (2000 words) Literature review
Literature review
Rather they are treated as entrepreneur’s wit responsibilities. The management as well as the juniors or subordinates look up to the mangers as leaders. The managers are not only expected to perform their tasks but also are
4 pages (1000 words) Literature review
Literature review
While most of the people in the world interact and relate freely in accordance with universally acceptable principles, the case scenario in China is different. They highly regard the “Concentrical guanxi circles” (Lee
4 pages (1000 words) Literature review
Literature review
These steps and rules were as highlighted as follows. That seems obvious enough, but a lot of people take it personally when they don’t hear back from someone right away. Resist the urge to get upset or mad, and never
2 pages (500 words) Literature review
Literature review
108). The sections that are in this review focus on the topic “induction in management and mainly concentrate on a variety of management approaches and leadership styles that are defined by two
7 pages (1750 words) Literature review
Literature review
In summary, the article examines how the issues of multiculturalism in Britain have affected the political thinking in the country. The author bases his arguments on a pivotal moment that
2 pages (500 words) Literature review
Comments (0)
Click to create a comment
Let us find you another Literature review on topic Do Divestitures Have PositiveWealth Effects Literature review for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us