Editorial

Editorial In the world of takeovers, be they mergers, acquisitions or other variants of alliances, we may be excused for thinking that true or economic value rules the day, or determines the deal. At least those of us who fondly believe that markets are reasonably competitive and information adequately’ available, However, in this quarter’s leading article we are rudely reminded of our less-than-perfect world. By nothing more than appeal to the commonsense of buyer,; and sellers, Ingemar Dierickx and Mitchell Koza of INSEAD point out a fundamental flaw in merger or acquisiion negotiations - information is unequally or asymmetrically distributed between buyer and seller. Result - the seller cannot reveal all, the buyer is likely to ‘buy a lemon’. Well, there are remedies, though probably no complete ‘cure’. The following might help. Guarantees; dea!ing only with long-time contacts or associates; joint ventures or combining assets. We may, nonetheless, still have to live with human nature. Earlier, in EMJ 9(2), Cynthia Van Hulle and Piet Sercu (Katholieke Universiteit Leuven) argued that bargaining, not competition, determined how gains, particularly the price, were distributed in takeovers. They demonstrated that, especially where the bid was hostile, bargaining interacts with bidding and is itself a function of the timevalue of money, competition, financial strength and initial bargaining power. These authors also believed that uncertainty about holv muc11 value the bidders would receive from acquiring the target company would profoundly affect bargaining strength. As with the interesting DierickxiKoza analvsis, we are left with the strong suspicion that sharp i\rits and psychology can deeplv affect negotiated outcomes of deals. Also in this issue, four authors (three papers) look at a ‘hot topic’ in management education today - the ‘internationalizing’ of MBA and executive education programmes in European business schools. They are all ‘for’; it’s how to achieve it. Mark Easterbv-Smith and Diane Preston believe that internationalizing teaching faculty, although difficult to achieve, is vital - and make suggestions on how to do it. Colin Carnal1 maintains that the Henley MBA has been internationalized by networking it with associated institutions and operating globally. John Heptonstall points to the success of Ashridge’s twoweek joint venture programme in executive education taking place in the UK, France and Germany, and believes that course design is the key to making managers feel truly European. There are many prescriptions for the same problem - how to make European managers and would-be managers feel truly international. One thing is clear - with the globalization of business, those internationallytrading corporations which do produce a cadre of such managers will have a strongly competitive edge.