China's different economic environment, government infrastructure, and legal system might cause different management buyout procedures and results from management buyout procedures in the United States. Management buyout was originally created to increase efficiency and reduce agency cost in the United States in the 1960s; but management buyout in China is merely a tool to provide incentive programs for current management teams and reduce state-owned corporate shares.

The goal of this project is to review the literature on how to buy an existing business and to synthesize the material into a written instructional manual that a regular individual or aspiring entrepreneur can use in understanding the process necessary to buy an existing small business.

Thesis (PhD (Economics))--University of Stellenbosch, 2008. / The primary financial objective of a firm is the maximisation of its shareholders’ value. A problem faced by the shareholders of a firm is that it is difficult to determine the effect of management decisions on the future share returns of the firm. Furthermore, it may be necessary to implement certain monitoring costs to ensure that management is focused on achieving this objective. A firm would, therefore, benefit from being able to identify those financial performance measures that are able to link the financial performance of the firm to its share returns. Implementing such a financial performance measure in the valuation and reward systems of a firm should ensure that management is aligned with the objective of shareholder value maximisation, and rewarded for achieving it. A large number of traditional financial performance measures have been developed. These measures are often criticised for excluding a firm’s cost of capital, and are considered inappropriate to be used when evaluating value creation. Furthermore, it is argued that these measures are based on accounting information, which could be distorted by Generally Accepted Accounting Practice (GAAP). Studies investigating the relationship between these measures and share returns also provide conflicting results. As a result of the perceived limitations of traditional measures, value based financial performance measures were developed. The major difference between the traditional and value based measures is that the value based measures include a firm’s cost of capital in their calculation. They also attempt to remove some of the accounting distortions resulting from GAAP. Proponents of the value based measures present these measures as a major improvement over the traditional financial performance measures and report high levels of correlation between the measures and share returns. A number of studies containing contradictory results have been published. On the basis of these conflicting results it is not clear whether the value based measures are able to outperform the traditional financial performance measures in explaining share returns. The primary objectives of this study are thus to: • Determine the relationship between the traditional measures earnings before extraordinary items (EBEI) and cash from operations (CFO), and shareholder value creation; • Investigate the value based measures residual income (RI), economic value added (EVA), cash value added (CVA) and cash flow return on investments (CFROI), and to determine their relationship with the creation of shareholder value; • Evaluate the incremental information content of the value based measures above the traditional measures. The information content of the traditional measures and the value based measures are evaluated by employing an approach developed by Biddle, Bowen and Wallace (1997). The first phase of this approach entails the evaluation of the relative information content of the various measures in order to determine which measure explains the largest portion of a firm’s market-adjusted share returns. The second phase consists of an evaluation of the incremental information content of the components of a measure in order to determine whether the inclusion of an additional component contributes statistically significant additional information beyond that contained in the other components. The study is conducted for South African industrial firms listed on the Johannesburg Securities Exchange for the period 1991 to 2005. The data required to calculate the measures investigated in the study are obtained from the McGregor BFA database. This database contains annual standardised financial statements for listed and delisted South African firms. It also contains EVA, cost of capital and invested capital amounts for those firms listed at the end of the research period. Including only these listed firms in the research sample would expose the study to a survivorship bias. Hence these values are estimated for those firms that delisted during the period under review by employing a similar approach to the one used in the database. The resulting sample consists of 364 firms providing 3181 complete observations. Since different information is required to calculate the various measures included in the study, different samples are compiled from this initial sample and included in the tests conducted to evaluate the information content of the measures. The results of this study indicate that the value based measures are not able to outperform EBEI in the majority of the relative information content tests. Furthermore, the measures EVA, CVA and CFROI are also not able to outperform the relatively simple value based measure RI. The results from the incremental information content tests indicate that although some of the components of the value based measures provide statistically significant incremental information content, the level of significance for these relatively complex adjustments is generally low. Based on these results, the claims made by the proponents of the value based measures cannot be supported. Furthermore, if a firm intends to incorporate its cost of capital in its financial performance measures, the measure RI provides most of the benefits contained in the other more complex value based measures.

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Abstracts in English, Zulu and Afrikaans / The stakeholder instrument (SI) is a conceptual framework developed to complement integrated reports for value creation, transparency and accountability. It is a tool developed specifically for stakeholders to have an understanding of the integrated reports and assist them in making informed decisions. Currently, integrated reports fail to provide meaningful insights into organisations’ performance and its strategy focus, thus making it difficult for stakeholders to understand the contents of the integrated reports. The research illuminated pertinent variables synonymous with value creation. The study involved analysis of data from 42 companies trading on the Johannesburg Stock Exchange and administration of 80 questionnaires on randomly selected respondents. Significant and positive correlations between value creation and the attributes namely integrated reports; corporate governance and financial measures were established. Contributions: The results of the empirical study provide significant perceptions into the process of stakeholder value creation. The study established the significance of complementing the integrated reports in creating stakeholder value. The study, further, authenticated the stakeholder instrument as a distinct antecedent of value creation. The study further illuminated the attributes that matter to the stakeholders and assist with effective decision-making and value creation. / Ithuluzi lababambiqhaza wuhlaka olwenzelwe ukweseka nokuthasisela phezu kwemibiko edidiyelwe ukuze kuthuthukiswe ukuhlomula nokubhekelelwa kahle kwababambiqhaza (value creation), ukusebenza ngokusobala kanye nokuphendula. Leli yithuluzi elenzelwe ukuqinisekisa ukuthi ababambiqhaza bayayiqonda imibiko edidiyelwe (integrated reports) futhi libalekelele ukuthi bathathe izinqumo eziphusile emva kokuhlonyiswa ngalo lonke ulwazi olungaba wusizo kubona. Njengamanje, imibiko edidiyelwe iyahluleka ukuhlinzeka ngolwazi olubonisa ukuqonda okujulile ukusebenza kwezinhlangano kanye namaqhingasu ezigxile kuwona izinhlangano, futhi-ke lokho kwenza kube nzima kubabambiqhaza ukuqonda ulwazi oluqukethwe yimibiko edidiyelwe. Ucwaningo lwahlonza ama-variable afanelekile ahlobene kakhulu nokuhlomula nokubhekelelwa kahle kwababambiqhaza. Ucwaningo lwabandakanya ukuhlaziywa kwedatha eyaqoqwa ezinkampanini ezingama-42 ezihweba ku-Johannesburg Stock Exchange futhi kwakhishwa amaphepha-mibuzo angama-80 anikezwa ababambiqhaza abaqokwa ngaphandle kokulandela indlela ethile ehlelekile (randomly), ukuze bawaphendule. Ucwaningo lwaveza ukuba khona kobudlelwano obunohlonze phakathi kokuhlomula nokubhekelelwa kahle kwababambiqhaza kanye nezicibunjalo zenkampani, okusho, imibiko edidiyelwe, ukuphathwa nokulawulwa kahle kwenkampani kanye nezinyathelo eziphathelene nezimali. Ulwazi olusemqoka olwakhiqizwa wucwaningo: Imiphumela yocwaningo oluphathekayo futhi olusekelwe phezu kwezinto ezibonakalayo (empirical study) ihlinzeka ngolwazi olunohlonze oluzolekelela ekuqondeni inqubo yokuhlonyuliswa nokubhekelelwa kahle kwababambiqhaza. Ucwaningo lwabonisa ukubaluleka kokweseka kanye nokuthasisela phezu kwemibiko edidiyelwe enqubweni yokuhlonyuliswa nokubhekelelwa kahle kwababambiqhaza. Ithuluzi lababambiqhaza laqinisekiswa futhi njengethuluzi elicacile eliwusizo olukhulu ekuhlonzweni kobudlelwano obuphathelene nokuhlonyuliswa nokubhekelelwa kahle kwababambiqhaza. Futhi ngaphezu kwalokho ucwaningo lwahlonza izicibunjalo ezibonwa ngababambiqhaza njengezibalulekile futhi ezilekelelayo ekuthathweni kwezinqumo ngobunyoninco kanye nasekuhlonyulisweni nokubhekelelwa kwababambiqhaza ngendlela efanele. / Die belanghebberinstrument is 'n konseptuele raamwerk wat ontwikkel is om geïntegreerde verslae vir waardeskepping, deursigtigheid en aanspreeklikheid te komplementeer. Dit is 'n instrument wat spesifiek ontwikkel is sodat belanghebbers die geïntegreerde verslae kan verstaan en om hulle te help om ingeligte besluite te maak. Tans bied geïntegreerde verslae nie betekenisvolle insig in organisasies se prestasie en hulle strategiefokus nie wat dit dus moeilik maak vir belanghebbers om die inhoud van geïntegreerde verslae te verstaan. Die navorsing identifiseer toepaslike veranderlikes wat sinoniem is met waardeskepping. Die studie het ontleding behels van die data van 42 maatskappye wat op die Johannesburg Aandelebeurs sake doen en die administrasie van 80 vraelyste aan respondente wat ewekansig geselekteer is. Beduidende en positiewe korrelasies tussen waardeskepping en die attribute, naamlik geïntegreerde verslae, korporatiewe beheer en finansiële maatstawwe, is geskep. Bydraes: Die resultate van die empiriese studie verskaf beduidende persepsies van die proses van belanghebberwaardeskepping. Die studie het die belang van die geïntegreerde verslae om belanghebberwaarde te skep, daargestel. Die egtheid van die belanghebberinstrument is ook as 'n kennelike antesedent van waardeskepping bewys. Die studie het ook die attribute geïdentifiseer wat vir belanghebbers saak maak en wat help met effektiewe besluitneming en waardeskepping. / Graduate School of Business Leadership / D.B.L.

This paper examines the different share valuation methods and principles likely to be used by a court in determining the fair value of dissenting shareholders’ shares in appraisal proceedings in terms of section 164(14) of the Companies Act 2008. It is submitted that the valuation principles and methods used by the courts will affect the operation of the triggering actions contemplated in subsections 164(2)(a) - (b). It is proposed that section 164 court appraisals are likely to be guided by the valuation methods and principles developed in section 252 and section 440K court appraisals under the Companies Act 1973, as well as by the decisions of the courts in the state of Delaware relating to share valuations under the appraisal remedy. It is further proposed that the purpose ascribed to the appraisal remedy will influence the application of these valuation methods and principles. / Mercantile Law / LL.M. (Corporate law)

This paper examines the different share valuation methods and principles likely to be used by a court in determining the fair value of dissenting shareholders’ shares in appraisal proceedings in terms of section 164(14) of the Companies Act 2008. It is submitted that the valuation principles and methods used by the courts will affect the operation of the triggering actions contemplated in subsections 164(2)(a) - (b). It is proposed that section 164 court appraisals are likely to be guided by the valuation methods and principles developed in section 252 and section 440K court appraisals under the Companies Act 1973, as well as by the decisions of the courts in the state of Delaware relating to share valuations under the appraisal remedy. It is further proposed that the purpose ascribed to the appraisal remedy will influence the application of these valuation methods and principles. / Mercantile Law / LL. M. (Corporate law)