• Constructing a total cost of ownership supplier selection methodology based on activity based costing and mathematical programming

      Degraeve, Zeger; Labro, Eva; Roodhooft, Filip (2004)
      In this paper we elaborate on a Total Cost of Ownership supplier selection methodology that we have constructed using real life case studies of three different industrial components groups in a firm. These case studies are presented in this article. Analysing the value chain of the firm, data on the costs generated by the purchasing policy and on supplier performance are collected using Activity Based Costing (ABC). Since a spreadsheet cannot encompass all these costs, let alone optimise the supplier selection and inventory management policy, a mathematical programming model is used. For a specific component group the combination of suppliers is selected that minimises the Total Cost of Ownership. TCO takes into account all costs that the purchase and the subsequent use of a component entail in the entire value chain of the company. The TCO approach goes beyond minimising purchase price and studies all costs that occur during the entire life cycle of the item in the organisation. Possible savings of between 6 and 14% of the total cost of ownership of the current purchasing policy are obtained for the three cases. Keywords: Activity Based Costing, mathematical programming, supplier selection, purchasing
    • Cross-border venture capital and the development of portfolio companies

      Devigne, David; Vanacker, Tom; Manigart, Sophie; Paeleman, Ine (2011)
    • Drivers of cost system development in hospitals: results of a survey

      Cardinaels, Eddy; Roodhooft, Filip; Van Herck, Gustaaf (2004)
      While many hospitals are under pressure to become more cost efficient, new costing systems such as Activity-based costing (ABC) may form a solution. However, the factors that may facilitate (or inhibit) cost system changes towards ABC have not yet been disentangled in a specific hospital context. Via a survey study of hospitals, we discovered that cost system development in hospitals could largely be explained by hospital specific factors. Issues such as the support of the medical parties towards cost system use, the awareness of problems with the existing legal cost system, the way hospitals and physicians arrange reimbursements, should be considered if hospitals refine their cost system. Conversely, ABC-adoption issues that were found to be crucial in other industries are less important. Apparently, installing a cost system requires a different approach in hospital settings. Especially, results suggest that hospital management should not underestimate the interest of the physician in the process of redesigning cost systems. Keywords: Activity Based Costing, Organizational Change, Cost Control, Hospital context
    • Earnings Management and Debt

      Sercu, Piet; Vander Bauwhede, Heidi; Willekens, Marleen (2006)
    • Failure processes and causes of company bankruptcy: a typology

      Ooghe, Hubert; De Prijcker, Sofie (2006)
      This paper describes a typology of failure processes within companies. Based on case studies and considering companies' ages and management characteristics, we discovered four types of failure processes. The first failure process describes the deterioration of unsuccessful start-up companies leaded by a management with a serious deficiency in managerial and industry- related experience. The second process reveals the failure process of ambitious growth companies. Those companies have, after a failed investment, insufficient financial means to adjust their way of doing business to the changes in the environment in order to prevent bankruptcy. Third, we describe the failure process of dazzled growth companies, leaded by an overconfident management without a realistic view on the company's financial situation. Lastly, the failure process of apathetic established companies, describes the gradual deterioration of established companies where management had lost touch with the changing environment. We also found that there is a great difference in the presence and importance of specific causes of bankruptcy between the distinctive failure processes . Errors made by management, errors in corporate policy and changes in the general and immediate environments differ considerably between each of the four failure processes.
    • Financial and investment interdependencies in unquoted Belgian companies: the role of venture capital

      Manigart, Sophie; Baeyens, Katleen; Verschueren, I. (2002)
      Fortis, the leading Benelux financial group, had been a success story of successive mergers of bank and insurance companies, with leadership in corporate social responsibility (CSR). One year after the acquisition of the major Dutch financial conglomerate ABN AMRO, the global financial crisis caused the collapse of the Fortis group. The purpose of this article is to use the case study of Fortis’s recent fall as a basis for reflective considerations on the financial crisis, from stakeholder and ethical perspectives. A selected number of key events of the history of the dramatic crisis at Fortis will be analysed from different ethical frameworks. Special consideration will be given to fairness of communication, shareholder activism and conflicts of interests of CEO’s mergers opportunities. A confrontation between the CSR policy and the reality raises the fundamental questions why the powerful CSR guidelines and ethical principles did not help in the assessment of the risks.
    • Financial reporting quality in private equity backed companies: the impact of ownership concentration

      Beuselinck, Christof; Manigart, Sophie (2005)
      We argue and empirically show on a sample of 270 unquoted, private equity backed companies that the shareholder structure of private companies influences the quality of their accounting information. We show that companies in which private equity (PE) investors have a higher equity stake produce accounting information that is of lower quality than companies in which PE investors have a lower equity stake, controlling for company size and age. We argue that this is evidence that a large equity stake is a substitute for high earnings quality.
    • First-round valuation of angel-backed companies: the role of investor human capital

      Collewaert, Veroniek; Manigart, Sophie (2009)
      In this first paper of the special issue, we identify some trends in open innovation research by analysing how the literature on this topics has evolved since the introduction of the concept in 2003. Research on open innovation has been mushrooming ever since and the scope has been broadened in different directions. Researchers also started to analyse open innovation at different level of analysis from the individual actors in organisations to ecosystems and national innovation systems. Despite the vast growth in research on open innovation, we identified several directions for further research: open innovation research should be linked to other management areas such as marketing, HRM, change management, etc. In addition, our understanding of open innovation could be improved if the recently developed insights could be related to the existing management theories.
    • Follow-on financing of venture capital backed companies: the choice between debt, equity, existing and new investors

      Baeyens, Katleen; Manigart, Sophie (2006)
      We study the financing strategies of 191 start-ups after they have received venture capital (VC) and thereby contribute to the staging literature. The VC backed start-ups have raised financing on 345 occasions over a five-year period after the initial VC investment. Surprisingly, bank debt is the most important source of funding for these young and growth-oriented companies, supporting the view that VC investors have a certifying role in their portfolio companies. Bank debt is available to firms with a lower demand for money, lower levels of risk and of information asymmetries, implying that staging of equity funding is less important for these firms. A firm only raises equity when it's debt capacity is exhausted, hinting that equity investors are investors of last resort. New equity is provided by the existing shareholders in 70% of the equity issues, supporting earlier findings that staged financing is important in venture capital financing. New shareholders invest when large amounts of funding are required and when risk and information asymmetries are high. We interpret these findings as support for the extended pecking order theory. In line with syndication arguments, new investors thus provide risk sharing opportunities and skills to screen and monitor and thereby reduce information asymmetries. New equity investors face adverse selection problems, however, in that only the most risky investments are syndicated. Keywords: financing strategy, venture capital, bank debt, external shareholders JEL classification: G32