After completing my MBA from a distinguished UK university with a distinction, I am currently working as a part-time researcher with a number of research organisations and am about to start my PhD at a highly prestigious UK university. Moreover, I have done a larger amount of research throughout my career and have also held an academic researcher position at a renowned university. My areas of academic interest are divided in three categories. Firstly, in the marketing area I have an interest in Marketing Management, Marketing Research, Direct Marketing, Retailing and Merchandising Management, Sales Promotion and Advertising Management, Selling and Sales Management, Franchising Structure and Management, Industrial Marketing, and Marketing Strategy. Secondly, in the management area I have an interest in Organisational Theory and Design, Business and Organisation Management, Human Resource Management, Corporate Strategy, Management and Organisational Behaviour. Lastly, in finance and general areas I have an interest in International Banking, Financial Institution Strategic Management, Investment and Private Banking, International Financial Management, International Financial Markets, Bank Financial Management, Corporate Risk Management, Micro Economics, Macro Economics, Quantitative and Qualitative Analysis and Research Methods.

Sample 1

Unilever

1. INTRODUCTION: (All the content of this study has been taken mainly from the Company Annual Reports and Reviews 2001-2006)

The aim of this study is to look at the effect of changes occurring in the global and/or regional economic environment on the multinational operations of “Unilever” during the period 2001-2006. The global and regional environment is passing through tremendous changes since the start of the year 2000. Globalisation, deregulation, financial liberalisation, economic reforms, advances in technology, enhanced activities of merger and acquisitions (M&As), launch of the euro as a single currency, changing corporate governance, etc amid financial crises such as recessions following the event of 9/11 etc all have affected the operations of Unilever. These all have led to more accommodating monetary and fiscal policies in the East Asian economies, lowering interest rates in USA and Europe, liquidity expansion, and fiscal and aid packages introduced by Japan which in turn have helped to improve these conditions (UNCTAD, 2006). What are the effects of these changes in the global and regional economic environment on inflation and interest rates? How has it affected the business operations, management structure, etc of Unilever? What kind of exchange rate exposures impacted Unilever and how has it managed these exposures while operating as a multinational corporation (MNC)? Did Unilever expand its operations during the period of study? How does Unilever finance its short-term and long-term operations and what is the capital structure of Unilever? How was the market value of Unilever affected by the changing strategies in a dynamic environment? The study aims to provide an insight to these and many more questions during the period 2001-2006.

Whereas section 2.0 contains the brief overview about the current global and regional environment; section 3.0 contains the overview about Unilever, its operations, management structure, etc. Section 4.0 contains the analysis of exchange rate management by Unilever. Section 5.0 contains the analysis of motives and expansion methods adopted by Unilever for expanding its operations during the period of study. Section 6.0 contains the analysis of Unilever’s capital structure amid the analysis of the ways of financing the short-term and long-term operations. Section 7.0 contains the analysis of the effects of the changing strategies on the market value of Unilever while responding to the operating environment. Section 8.0 contains the conclusion.

2. AN OVERVIEW OF THE CURRENT GLOBAL AND REGIONAL ENVIRONMENT

Let’s see what kind of financial crises, recessions and economic booms occurred in the global and regional environment.

A large number of recessions have affected throughout the history of the world. The European Union and Australia were affected by the recessions during 2000-2001 and with United States in 2002-2003. Canada avoided the recession and Russia, after a long decline during the 1990s, started recovering. However, Japan’s recession, which started in the 1990s, continued. During the 1990s a large number of economists predicted the early recessions of the 2000 because of the boom of the 1990 which was a decade of low inflation and low unemployment. This boom started declining after the regional crises of East Asia know as the Asian Currency Crises 1997-1998. Moreover, during the booms of the 1990s a slight recession was felt during the period 1995-1998. (Koo, 2003; Brussee, 2005; Semmler, 2006; Wiedemer et. al. 2006)

Below is a description of some specific events taking place in the different regions.

a) NORTH AMERICA:

A relatively mild contract in the economy of North America was caused mainly by the following collapses:

Dot Com Bubble: A speculative bubble flourished during 1995-2001 and collapsed afterwards contributing to recession in the early 2000s. Stock markets in western nations experienced a rapid growth in new internet sector and related fields.

September 11th Attack (9/11): Terrorist attacks on the World Trade Centre in the US after which an official recession was declared.

Accounting Scandals: Rather political and business scandals caused by disclosure of misdeeds by trusted executives mainly of large public corporations, e.g. overstating revenues, understating expenses, misusing funds, etc. A large number of accounting scandals affected the US in 2002 such as Deloitte & Touche, Ernst & Young and PricewaterhouseCoopers scandals. (Koo, 2003; Brussee, 2005; Semmler, 2006; Wiedemer et. al., 2006)

b) LATIN AMERICA:

Argentina economic crises in early 2000 resulted in a decrease in real GDP. This economic crisis ended during 2005 but still poses strict challenges for the country. (Koo, 2003; Brussee, 2005; Semmler, 2006; Wiedemer et. al., 2006)

c) ASIA AND OCEANIA:

Asia was mainly affected by the Asian Financial Crises which occurred due to the economic unrest in 1997 resulting from the collapse of Kia in South Korea and Thailand. Stock markets, currencies and other assets prices were all affected by this economic unrest. There was a dreadful currency decline relative to the US dollar. (Koo, 2003; Brussee, 2005; Semmler, 2006; Wiedemer et. al., 2006)

Moreover, in the countries of Oceania, the Australian economy contracted in early 2000 due to the imposition of taxes on various goods and services, rapid US economic slowdown and a post-Olympics construction slump. (CNN, 2001)

d) EUROPE:

The launch of a single currency in European areas was met by much anticipation and the Euro, as single currency, experienced depreciation throughout 2000-2001 followed by inflation for a few months in 2001 and deflation in early 2002. The euro started appreciating against the US dollar in early 2002 and currently is stronger than the US dollar. (Koo, 2003; Brussee, 2005; Semmler, 2006; Wiedemer et. al., 2006)

These changes mentioned above raise the uncertainty of certain factors including competitive pricing; consumption levels; physical risks; legislative, fiscal, tax and regulatory developments; terrorism; and economic, political and social conditions in the environments affecting Unilever.

3. OVERVIEW OF THE UNILEVER GROUP:

The Unilever Group is comprised of two parent companies: a) Unilever N.V. (NV) and b) Unilever PLC (PLC). NV is a public limited company registered in the Netherlands. NV has listing of shared and depository receipts for shares on Euronext Amsterdam and New York Registry shares on the New York Stock Exchange. PLC is again a public limited company registered in both England and Wales. Its shares are listed on the London Stock Exchange and New York Stock Exchange (as American Depository). These two companies together form a single economic entity and constitute a single reporting entity for the purpose of consolidated accounts. Both NV and PLC present their respective consolidated accounts. Further, their subsidiaries are also listed in the local stock exchanges, for example Unilever Pakistan is listed in Karachi and Lahore Stock Exchanges in Pakistan. (Unilever, 2001-2006)

Before the launch of the euro, all reporting of the consolidated accounts was in pounds sterling as shown by the consolidated accounts of 1999. Afterwards the euro was adopted as a base currency for the consolidated accounts representation. Unilever adopted the IFRS (International Financial Reporting Standard) on 1st January 2005, which differs from US GAAP (General Accepted Accounting Principles), as adopted by UK and European Law. (Unilever, 2001-2006)

Moreover, before 2000 they divided their operation into five regions, more than 100 countries, namely:
• Europe
• Latin America
• North America
• Asia and Pacific
• Africa, Middle East and Turkey

However, afterwards they reduced their regions (only in their reports, not physically) to three, namely:
• Europe
• The Americas
• Asia Africa (Unilever, 2001-2006)

Furthermore, Unilever has a dual management structure which is constantly passing through reforms since 2000. According to their report, “Unilever is one of the world’s most culturally diverse companies with 24 different nationalities represented among our top 123 managers worldwide.” What’s more, through a business-oriented framework Unilever is trying to reform its corporate governance to foster “One Unilever” programme to reduce management layers for delivering faster decisions and faster execution. The structure mainly comprised of:

• Executive Directors (including group CEO)
• Joint Secretaries
• Non-Executive Directors
• Unilever Executives (including three Regional Presidents (for Europe, The Americas and Asia Africa), two Category Presidents (for Foods, and Home and Personal Care), the Chief Financial Officer and the Chief HR Officer)
• Senior Corporate Officers (Unilever, 2001-2006)

In addition, the operations of Unilever are divided mainly into two groups namely: a) Foods and b) Home and Personal Care. They operate in the fast-moving consumer goods (FMCG) industry. They have a wide and diverse set of competitors shown in Table 3.1 below. Many of them operate internationally and some of them have a narrow or regional focus.



The main motive for them to operate as an MNC is enhancing their shareholder value by constantly enhancing their revenues, profit, etc while operating in more than 100 countries. Other motives are managing/allocating capital more effectively and efficiently, to enhance its transnationality index (Calculated as the average of the following three ratios: foreign assets to total assets, foreign sales to total sales and foreign employment to total employment. (http://www.unctad.org/)) (currently ranked 9th worldwide) and internationalisation index (Calculated as the number of foreign affiliates divided by the number of all affiliates. (http://www.unctad.org/)) (currently ranked 57th worldwide), etc. (Unilever, 2001-2006)

4. EXCHANGE RATE RISK MANAGEMENT:

As already mentioned, Unilever has made the euro its base currency. All the earnings etc around the globe have to be converted into euros. The fluctuations in the spot rate of the euro at any given time, in any given region or country, determines the exchange rate risk faced by Unilever. As mentioned in section 2, the different geographical regions have passed through different types of recessions, financial and economic crises, etc so in turn these have an effect on the exchange rate according to their respect magnitude. This can be seen by the constant change in the exchange rate of the euro across the globe which in turn threatened the growth and profitability of Unilever. Let’s see the different types of risks faced by Unilever in terms of transaction, economic and translational exposures, as explained by Brealey (2003), Madura (2003) and Shapiro (2006) these are the three main types of exposures of the exchange rate, and how they constantly renewed their strategy to manage the risk. (Unilever, 2001-2006)

4.1. TRANSACTION EXPOSURE:

Changing prices of raw materials and commodities affected the different types of contracts amid the changes in the spot exchange rate of the euro in light of the volatile political environment, recession and financial crises. For example, due to the launch of the euro as a single currency its value declined at first. Due to this, all transactions that had taken place before its launch were affected. As shown in Figure 4.1, the amount of receivables and payables has constantly declined from 2001-2006. This shows that Unilever has reduced the amount of transaction exposure as illustrated by the magnitude of receivables and payables and managed them successfully with one of the methods explained in the next section. (Unilever, 2001-2006)



4.1.1. Techniques Used by Unilever to Manage Transaction Exposure:

They purchase forward contracts for raw materials and commodities and future contracts to hedge against future price movements. Moreover, exposure to interest rates are secured by fixed–rate, long-term debt issues and a straightforward derivative financial instrument such as interest rate swaps. In general, cash is invested short-term at floating interest rates. In addition, they also use the option strategy for hedging against the transaction exposure. They have also used the strategy of invoice option. They invoice most of their receivables and payables in euros.

4.1.2. OTHER STRATEGIES:

Unilever has reduced its partnerships during the period 2001-2006 to fewer major suppliers to cope with exchange rate risk as well developed and implemented an integrated supply management information system. (Unilever, 2001-2006)

4.2. ECONOMIC EXPOSURE:

Due to uncertainty in factors including competitive pricing; consumption levels; physical risks; legislative, fiscal, tax and regulatory developments; terrorism; and economic, political and social conditions in the environments affecting the net present value of future expected cash flows from the operations and investments, Unilever adopted a proactive approach for developing marketing and production initiatives to ensure profitability and competition in the long run. (Unilever, 2001-2006)

4.2.1. CHANGING MARKETING STRATEGY:

Unilever constantly changed its advertising, branding, pricing, promotional, distribution and packaging strategies to cope with the economic exposures. For example, they used product development strategies, i.e. introduced a new product range in Sunsilk and low-priced Knorr stock cubes. They changed from an Envelopment (Encirclement) Strategic MNC to a Frontal Attacking MNC for enhancing the growth, i.e. increase market share. (Unilever, 2001-2006)

4.2.2. CHANGING PRODUCTION INITIATIVES:

In order to cope with the economic exposure, Unilever adopted a low-cost production strategy by shifting production to areas where it was cheaper to produce and cheaper to buy the raw material etc. (Unilever, 2001-2006)

4.3. TRANSLATIONAL EXPOSURE:

Unilever calculates hypothetical foreign exchange rate sensitivity (FERS) based on a 10% change in foreign exchange rates. Both NV and PLC report their respective consolidated statements by the number of subsidiaries operating under each parent. The majority of the subsidiaries operate as integrated foreign entities while others (negligible) operate as self-sustaining foreign. The balance sheet and income statement of PLC are firstly reported in Great British pounds and then they are translated into euros to present its consolidated statements with NV. After analysing discussions and other information in various reports (2001-2006) Temporal Method for managing the translational exposure and report their consolidated statements in IFRS. And after the introduction of the euro they have their consolidated statements reported in euros. (Unilever, 2001-2006)

However, Unilever mentioned in their 2006 Annual Report that they adopt varyious strategies depending on the type of exposure, the country and the magnitude, etc and they do leave some amount of risk that is immaterial in nature.

5. UNILEVER MOTIVES AND METHODS TO EXPAND: Unilever, as already, wants to enhance its shareholder value by constantly expanding its operations by entering into profitable markets. Moreover, it wants to be cost effective while taking advantage of the economies of scale (domestic as well as international), international diversification in terms of sales and production. It wants to take advantage of lower labour costs and foreign expertise as well as technology while managing/allocating capital more effectively and efficiently to enhance its transnationality index (currently ranked 9th worldwide) and internationalisation index (currently ranked 57th worldwide) etc. Therefore, they used the methods mentioned in the next paragraph for expansion into new areas.

They expanded their operations through foreign direct investment by building new plants in different product categories, such as tea, in different countries such as Russia. Moreover, they have also expanded by building new production plants (overseas production) in cheap labour areas such as India. Furthermore, they have used merger and acquisition strategy throughout since 2000 which is illustrated by the acquisition (horizontal integration) of US diet food specialists, i.e. Slim Fast Foods and novelty ice-cream maker Ben & Jerry's Homemade Inc. (CNN, 2000; Flex news, 2006)

6. CAPITAL STRUCTURE AND WAYS OF FINANCING (SHORT-TERM AND LONG-TERM):

The capital structure of Unilever constitutes the following:

a) Shareholders’ capital: This comprises the following:

i. Called up share capital
ii. Share premium account
iii. Other reserves
iv. Retained profit

b) Minority interest.

As shown in Table 6.1 and Figure 6.1 the debt to equity ratio (DE) of Unilever increased from 0.78 (2001) to 0.85 (2002) then started declining gradually to 0.59 (2006) in parallel with the, first, depreciating and then appreciating value euro. The DE remained below the level of 1, i.e. DE<1 through the period of study which shows that Unilever uses more equity (cross listing in international stock markets) than debt to finance its short- and long-term operations. Therefore, Unilever bears a lesser amount of risk. However, equity on its own is not enough for financing all the operations. Unilever also uses bonds (Euro-Bonds), property and other methods (such as financial derivatives and financial leases) to finance its short- and long-term operations.



7. MARKET VALUE, OPERATING ENVIRONMENT AND CHANGING STRATEGIES:

As shown in Table 7.1 and Figure 7.1, the market value of Unilever (NV) constantly declined from 22.067 (2001) to 16.467 (2004) and afterwards it increased to 20.89 (2006). This is illustrated by the fact that after the introduction of the euro, the currency depreciated at first and than started appreciating. Moreover, the market value significantly improved due to changing marketing strategies such as pricing, promotion, product development, low-cost production strategy, overseas expansion in terms of plants and production, and using certain hedging strategies such as forward and future contracts. This is the same as with the PLC as shown in Table 7.1 and Figure 7.2.


(Source: Self-made from values taken from Unilever Annual Reports 2001-2006)

In addition, Unilever successfully changed its strategies and managed its operations in all the regions. For example, due to the recession in the US the interest rates fell and this, in turn, led to lower prices. As already mentioned Unilever changed its strategies to take advantage of low-cost production in order to reduce the prices of its products. Therefore, Unilever successfully, or appears to have successfully, responded to the changing conditions in the environment. Moreover, it changed from its competitive strategy of envelopment to frontal attack for enhancing growth, i.e. increase market share in terms of the competition.





8. CONCLUSION:

First of all, it is worth mentioning that this study is not very broad due to the word limits and limited access to information. However, in light of the research carried out, Unilever seems to have successfully implemented a sound strategic base while responding to the complex and dynamic environment. Due to two parent companies merging into a unified single economic activity, its operation appears to be more transnational rather than multinational. Its performance was affected by the changes taking place in the environment especially due to the launch of the euro as a single currency but due to effective and efficient management and implementation of strategies they have not even have experienced a constant growth as well as expanded their operations (overseas production) amid with successfully managing the exchange rate exposure and striving to improve their ranking in the translational and internationalization indexes.

9. BIBLIOGRAPHY:

Brealey, R.A., and Myers, S.C. 2003. Principles of Corporate Finance. McGraw-Hill.
Brussee, W. 2005. The Second Great Depression. Booklocker.com, Inc.
CNN, 2001. Australian recession fear vanishes [online].
Available at: http://archives.cnn.com/ [Accessed: 25th May, 2007]
CNN, 2001. Unilever Feasts on deal [online].
Available at: http://money.cnn.com/ [Accessed: 25th May, 2007]
Flex news, 2006. Unilever says to invest millions in Russia [online]. Available at:
http://www.flexnews.com/ [Accessed: 25th May, 2007]
Koo, R.C., 2003. Balance Sheet Recession: Japan’s Struggle with Uncharted Economics and its Global Implications. John Wiley & Sons Inc. 10-34, 66-98, 210.
Madura, J. 2003. International Financial Management. 7th ed., Thomson - South Western.
Semmler, W., 2006. Asset Prices, Booms and Recessions: Financial Economics from a Dynamic Perspective. 2nd ed. Springer US. pp.110-157.
Shapiro, A.C. 2006. Multinational Financial Management. 8th ed. John Wiley & Sons Inc.
UNCTAD, 2006. Trade and Development Report [online].
Available at: http://www.unctad.org/ [Accessed: 25th May, 2007]
Unilever, 2001. Company Annual Report 2001 [online].
Available at: http://www.unilever.com/ [Accessed: 25th May, 2007]
Unilever, 2002. Company Annual Report 2002 [online].
Available at: http://www.unilever.com/ [Accessed: 25th May, 2007]
Unilever, 2002. Company Annual Review 2002 [online].
Available at: http://www.unilever.com/ [Accessed: 25th May, 2007]
Unilever, 2003. Company Annual Report 2003 [online].
Available at: http://www.unilever.com/ [Accessed: 25th May, 2007]
Unilever, 2003. Company Annual Review 2003 [online].
Available at: http://www.unilever.com/ [Accessed: 25th May, 2007]
Unilever, 2004. Company Annual Report 2004 [online].
Available at: http://www.unilever.com/ [Accessed: 25th May, 2007]
Unilever, 2004. Company Annual Review 2004 [online].
Available at: http://www.unilever.com/ [Accessed: 25th May, 2007]
Unilever, 2005. Company Annual Report 2005 [online].
Available at: http://www.unilever.com/ [Accessed: 25th May, 2007]
Unilever, 2005. Company Annual Review 2005 [online].
Available at: http://www.unilever.com/ [Accessed: 25th May, 2007]
Unilever, 2006. Company Annual Report 2006 [online].
Available at: http://www.unilever.com/ [Accessed: 25th May, 2007]
Unilever, 2006. Company Annual Review 2006 [online].
Available at: http://www.unilever.com/ [Accessed: 25th May, 2007]
Wiedemer, D.; Wiedemer R.; Spitzer C. and Janszen, E. 2006. America's Bubble Economy: Profit When It Pops. John Wiley & Sons Inc. pp.12-97.

Sample 2

Proposal. Empirical Study of M&As, whether good or bad, with respect to the European Financial Services Industry

1. INTRODUCTION:

One plus one makes three: this equation is the special alchemy of a merger or an acquisition. The key principle behind buying a company is to create shareholder value over and above that of the sum of the two companies. Two companies together are more valuable than two separate companies - at least, that's the reasoning behind M&A. This rationale is particularly alluring to companies when times are tough. Strong companies will act to buy other companies to create a more competitive, cost-efficient company. The companies will come together hoping to gain a greater market share or to achieve greater efficiency. Because of these potential benefits, target companies will often agree to be purchased when they know they cannot survive alone. (PricewaterhouseCoopers, 2006)

This research paper will be centring on the topic of “Empirical Study of M&As, whether good or bad, with respect to the European Financial Services Industry”. The top 20 mergers and acquisitions occurring in the European sector since 2000, including the UK, will be empirically analysed. The main aims and objectives of the study that form the basis of the research questions will be:
• What is the rationale behind M&As?
• Whether M&As increase or decrease the efficiency of the operations specifically in the financial services industry?
• Whether the empirical study from the top 20 M&As in the European sector since 2000 provides any evidence of an increase in overall performance of the operation of the organisations or a decrease in overall performance of the operation of the organisations.
• Whether empirical study provides any evidence for the M&As to be good or bad for an organisation.
• Examining what the assumptions are behind the M&As in view of top-level management in the European sector?

Some expected research includes:
• Whether top-level management believes that the topology of the organisational structure changed after its merger or acquisition.
• Whether the profitability, efficiency and cost to income ratio of the organisation changed after its merger or acquisition?

Whereas the following section briefly outlines the research approach and research strategy for the above research topics, section 3 will contain a critical literature review. Section 4 will contain a discussion regarding the reliability and the validity issues faced by the adopted research strategy. Section 5 will contain the methodology for data collection. Section 6 will contain the conclusion. Section 7 will highlight the limitations of the research. Finally, Section 8 will contain the timescale for the research.

2. RESEARCH APPROACH AND STRATEGY:

Section 2.1 will discus the research approach and section 2.2 will discuss the research strategy to be used.

2.1. RESEARCH APPROACH:

This research will focus on the philosophy of positivism because out of the two different research approaches (shown in Figure 2.1) this research will follow a deductive approach, i.e. testing theory. The deductive approach, as compared with that of the inductive approach, owes more to the philosophy of positivism instead of interpretivism which is more attached to the inductive approach. (Saunders et. al., 2005)



The other reasons why the research will follow the deductive approach instead of inductive are illustrated below:

• First of all, a theoretical conceptual framework about M&A’s activities around the world will be developed in order to develop an understanding of what we basically mean by M&As, what the prime rationale is behind M&As, what different research there is in the field of M&As, etc.

• Secondly, another theoretical framework about the top 20 mergers and acquisitions in the European sector since the 2000s will be developed in order to establish the performance of these mergers and acquisitions.

• Thirdly, different research hypotheses will be made to answer the research questions, e.g. the level of profitability of a particular organisation increased after its merger or acquisition.

• Furthermore, data will be obtained from different annual reports and databases about the performance of the top 20 M&As and, with the help of questionnaires, the views of top-level management about M&A’s activities will be sought.

• In addition, the hypothesis will be expressed in terms of the variables such as ROA, ROE, cost to income ratios, etc.

• Moreover, inferential statistical tools will be used to analyse the relationships between the data, i.e. for testing the hypothesis. For example, the ANOVA test will be used to see whether there is a significant difference in the level of efficiency before and after the merger or acquisition took place.

• After that, on the basis of the results of the different inferential statistical tools, the research will confirm the theory or theories discussed in the literature review or indicate the need for any modification in order for a new idea/theory to explain why a particular merger or a particular acquisition can be good or bad. In short, research will follow theory rather than data and will be particularly concerned about the theoretical context in which M&As took place. Additionally, it will form highly structured research design that favours operationalised concepts to measure the facts quantitatively and in a generalised way. (Greenbaum, 1998; Saunders et. al, 2005)

Moreover, the research will not follow the inductive approach because the deductive approach constructs a more flexible methodology that permits alternative explanations of what is going on and forming new theories, which in my view is a requirement of doctoral level (PhD) instead of a dissertation at postgraduate level. (Greenbaum, 1998; Saunders et. al, 2005)

2.2. RESEARCH STRATEGY:

Research strategy is basically a general plan for undertaking any kind of research. There are about six research strategies shown in Figure 2.1. This research will follow a combination of experiments and survey strategy. But before following them, a small mock focus group will be conducted as a part of the exploratory research in order to clear the domain for the questionnaire to be prepared for top-level management. A brief description of the mock focus group outline is depicted in Table 2.2 along with the reasons for following a combination of experiments and survey research strategy as:

• Firstly, it is more closely associated with the deductive research approach; and

• Secondly, research will require collecting data (secondary nature) from a large number of sources including the databases, journals, reports, questionnaires, etc (that have already been used for its original purpose) in an economical way which is possible by following the survey strategy.

• Thirdly, questionnaires will be designed for getting data (primary nature) about the feelings of top-level management (the organisations of the top 20 M&As), all over the European sector, about the M&As activities.

• Furthermore, ANOVA with TUKEY and Regression Analysis (Inferential Statistical Tests) will be performed.

• Moreover, this research requires a longitudinal study of M&As taking place over a given period (from 2000s onwards) which can be done appropriately with the help of the surveys method. (Greenbaum, 1998; West, 1998; Malhotra, 2002; Zikmund, 2003 and Saunders et. al., 2005)



3. CRITICAL LITERATURE REVIEW:

The critical literature review basically forms the foundation on which any research is built. The literature review methodology depends precisely on the approach that will be used in the research, i.e. either deductive approach or inductive approach. (West, 1999; Zikmund, 2003; Saunders et. al., 2005)

As already explained in section 2, the research approach appropriate for the proposed research will be that of deductive as deductive research explores the theory and then examines the set of data. These data will be analysed in coherence with the literature consulted for the research. There is a constant need to revise the literature in order to maintain consistency in research being performed. Moreover, Gall et. al. (1996), West (1999), Malhotra (2002) and Zikmund (2003) define some purposes for the literature review which have been shown in Table 3.1.



A brief explanation of how, and what, literature sources will be used in the research is as follows:

3.1. PRIMARY LITERATURE SOURCE:

In this mainly reports, company reports and some government publications will be consulted. An example of the report adopted from PricewaterhouseCooper about the M&As in Europe is:

In 2005, European financial services’ (FS) deal activity increased strongly in deal value terms, while total deal numbers also increased compared with 2004. Deals valued at €78.9 billion were announced in the European FS sector, making it the second most active sector in Europe after energy. This is an increase of €32.7 billion (73%) from the total of €44.8 billion of announced deals in 2004. Furthermore, the total number of deals reached 353, an increase of 14.2% on 2004 (309 deals). As shown in Figure 3.1.1, the rise in cross-border acquisitions over the last three years is what is largely behind the overall increase in European financial services’ deals when measured by value. With the expansion of the European Union (EU) and financial services’ business leaders more willing to consider European consolidation, this trend is likely to continue. In 2005 and 2006, significant deals across Europe with no single country dominating the European FS deal activity in the way the UK and Ireland have done in recent years. The three most active regions – Germany, Italy, and the UK and Ireland – accounted for approximately 60% of all FS deals. (PricewaterhouseCooper, 2006)



3.2. SECONDARY LITERATURE SOURCE:

Books, journals and internet will be consulted for the research literature review.
An example of the literature review that will be adopted from journals is:

“The global economic environment continues to throw up some key challenges for the financial services industry. Recent market volatility has perhaps signalled a subtle shift of view about the economic outlook, as apparent certainty has given way to increasing uncertainty. Over the last three years, the financial markets have benefited from the combination of strong growth, low inflation and low interest rates. The recognition that the next three years could prove rather different is no bad thing. In this more challenging environment it is crucial that financial services companies keep focused on the key issues and strategies that will enable them to grow and improve their profitability and manage their risk.” (KMPG Us, 2006)

3.3. TERTIARY LITERATURE SOURCE:

A combination of dictionaries and encyclopaedias will be used for the research. An example is:

In business or economics a merger is a combination of two companies into one larger company. (Wikipedia, 2006; Investopedia, 2006)

4. RELIABITLY AND VALIDITY OF THE RESEARCH STRATEGY:
v Section 4.1 will discuss the threat to reliability and section 4.2 will discuss the threats to validity apparent in the research.

4.1. THREATS TO RELIABILITY:

The threats to the reliability apparent in the research are categorised, according to Robson (2002) as illustrated by Saunders et. al. (2005), into four threat categories as follows:

4.1.1. SUBJECT/PARTICIPANT ERROR:

For the collection of secondary data from databases, annual reports the subject/participant error will be zero per cent. Whereas, the questionnaire used to get data from top-level management may have a lower level of subject/participant error as top-level management are very professional and timings etc do not affect their filling out the questionnaires.

4.1.2. SUBJECT/PARTICIPANT BIAS:

Level of bias tends to be medium in the questionnaires method as top-level management might show a biased behaviour towards claiming the M&As good or bad. Secondly, the level of bias tends to be lower for the secondary data collection method.

4.1.3. OBSERVER ERROR:

The observer error tends to be above medium level in the secondary data collection method because the observer may consider the particular M&A’s performance to be bad instead of being good in reality or data errors in the data collecting from secondary sources. Moreover, the observer error tends to be negligible in the questionnaires method.

4.1.4. OBSERVER BIAS:

This is same as that of the observer error. The level of observer bias is above medium level in the secondary data collection method and the level is negligible in the questionnaires method.

4.1.5. OTHER THREATS TO RELIABILITY:

There may be some other threats to the reliability of the surveys method. These are:

i) Firstly, data collected from different means may tend to be in different formats, e.g. suppose some of the data collected for the ROE for year 2004 for five M&As tends to be from Bankscope, for ten M&As tends to be from annual reports, and the remainder from other sources such as the internet etc, then the consistency of the data is going to be affected.
ii) Secondly, missing values while performing the inferential statistical tests might affect the consistency of the results.
iii) Thirdly, interpretation of the results, literature review, etc again might affect the consistency of the adopted research strategy.
iv) Fourthly, different levels of confidence interval selected at different times might affect the research strategy while performing the inferential statistical tests.
v) Fifthly, unconscious misinterpretation and falsification as illustrated by West (1999), Malhotra (2002), and Zikmund (2003) might become a threat to reliability apparent in research strategy.

In short, the threats to reliability apparent in the research strategy are of medium level.

4.2. THREATS TO VALIDITY:

The threats to validity apparent in the research are of low level and are also categorised according to the research of Robson (2002) as illustrated by Saunders et. al., (2005) as follows:

4.2.1. HISTORY:

If the questionnaire conducted by top-level management after, say, a particular merger resulted in the top-level management salary being reduced, then their questionnaire filling can be misleading and might affect the findings. Likewise, data obtained from the Bankscope can be different if collected at different periods because Bankscope constantly upgrades it database (provided if the M&As were in the banking industry as Bankscope deals with the data of banks).

4.2.2. TESTING:

The statistical test applied to test the particular set of data might be invalid because the assumptions made for performing the test might be invalid.

4.2.3. INSTRUMENTATION:
v Not apparent in the adopted research strategy.

4.2.4. MORTALITY:

Not apparent in the adopted research strategy but can have a negligible affect if any of the top-level management dies before filling out the questionnaire.

4.2.5. MATURATION:

This might have an effect and can be linked to the history because some events might affect the style of top-level management and this in turn might affect the way they fill out the questionnaires. Moreover, data taken from, say, any database about the financial aspects of the any given merger or acquisition might be affected due to the change in the style of collecting, compiling and organising data.

4.2.6. AMBIGUITY ABOUT CAUSAL DIRECTION:

There might be medium level of ambiguity apparent in the research strategy, e.g. ambiguity about the correct statistical test to perform, ambiguity about the interpretation of the results of the statistical tests, ambiguity about the consultation and linking of the literature review, etc.

4.2.7. OTHER THREATS TO VALIDITY:

i. Firstly, the level of generalisability, i.e. external validity, tends to be low as the research strategy adopted might/will provide generalisable results due to adoption of the deductive approach. Moreover, the results and findings will/might be applicable to other research settings such as other M&As and research carried out on M&As in any other context.
ii. Secondly, as already mentioned, there might be some logical leaps and false assumptions made while carrying out the research with the adopted research strategy and might lead to invalid identification of the research population (e.g. top-level management in this case), data collection methods adopted (to be discussed in section 5), data interpretation (while performing the inferential statistical tests), development of conclusion, etc.
In short, the threats to validity apparent in the research strategy tend to be of low level.

5. DATA COLLECTION METHODOLOGY:

As already mentioned in section 3 the data to be analysed will be a combination of primary and secondary data. The most probable methods used in collecting this data will be:

5.1. PRIMARY DATA:

Questionnaires will be used to collect the primary data in order to get the views of top-level management about the assumptions behind the M&As and what they feel was good or bad about a particular merger or acquisition. Following methodology will be used as shown in Figure 5.1.

• Mainly self-administered questionnaire method will be used. In it, the first of the on-line questionnaire method will be used. If needed due to any problem occurring in the on-line questionnaire method, then the postal questionnaire method will be used to support the on-line version.

• Secondly, if any kind of further information is required after conducting the self-administered questionnaires method, then the interviewer-administered questionnaire method will be used. In it specifically, the telephone interview method will be conducted to get the information required from all or specific top-level management.



5.2. SECONDARY DATA:

The research questions and objectives require descriptive information to support findings as well as needs data about the financial performance of the M&As. Moreover, they require to specify relationships between variables with the help of descriptive or predictive equations. Secondary data in this context serves as fact finding and model building and includes both qualitative, as well as quantitative, data. (West, 1999; Malhotra, 2002; Zikmund, 2003) The following sources in the secondary data division will be explored to gather relevant data as shown in Figure 5.2.

6. CONCLUSION:

The assignment basically discusses the proposed plan for carrying out research in order to perform the final dissertation required for the completion of the MBA Banking & Finance programme. Therefore, this proposed plan might/will require modifications as per requirement of the supervisor and personal tutor of the researcher.

7. LIMITATIONS OF THE RESEARCH:

The majority of data which will be contributing to this dissertation, will be almost entirely secondary in nature. Various books, journals and articles have been used to form the opinions put forth. The data for the financial features of the banks have been taken from the Annual Reports and the Bankscope.

8. TIMESCALE:

The preliminary research work on this dissertation began in May 2006 and the final submission of the project projected as being about three to four months

9. BIBLIOGRAPHY:

Gall, M.D., Borg, W.R. and Gall, J.P., 1996. Educational Research: An introduction. 6th ed. New York, Longman.
Greenbaum, T.L., 1998. The handbook for focus group research. Sage Publications, p.1-57
Investopedia, 2006. Merger and Acquisitions [online].
Available from: http://www.investopedia.com/ [Accessed: 18th April, 2007].
KMPG US, 2006.Frontiers in finance [online].
Available from: http://www.us.kpmg.com/ [Accessed: 18th April, 2007].
Malhotra, N.K., 2002. Basic marketing research: applications to contemporary issues. Prentice Hall, pp.34-50, 80-142, 150-192
PricewaterhouseCooper, 2006. Financial Services M&A[online].
Robson, C., 2002. Real World Research. 2nd ed. Oxford, Blackwell.
Saunders, M.; Lewis, P. and Thornhill, A., 2005. Research Methods for Business Students. 3rd ed. Pearson Education. pp.29-24, 31-46, 61-91, 100-123, 206-230, 298-333
West, C., 1999. Marketing Research. Macmillan Business, pp.52-62, 92-109, 138-148,
Wikipedia, 2006. Merger and Acquisitions [online].
Available from: http://en.wikipedia.org/ [Accessed: 18th April, 2007].
Zikmund, W.G. 2003. Business Research Methods. 7th ed. Thomson South-Western. pp.135-233, 329-367.