Comportamientos implicados en incentivar el espíritu de las

A different picture can be found by matching the management structure with the duration of the refinancing process discussed in section 5.3.1 and allowed for a more detailed exploration of behavioural aspects.

5.4.2.1 Overconfidence

The three cases that aimed to execute a refinancing within a period of six months (Case 1, Case 4 and Case 6) were all led by owner-managers with the already presented result that two of these three cases had to use an intermediate step to avoid an increased risk of insolvency.

Except for the middle management participant in Case 1, none of the responsible managers had a prior external job position where relevant experience from financing processes or decisions in other firms could be gained.

Financial advisors that were mandated in the first four cases were not able to mitigate this process risk component in Case 1 and Case 4. These mitigation factors could have been for example (a) to highlight the importance of an internal preparation prior to

start the refinancing process or (b) to explain typical pitfalls within a financing process. On the other hand, Case 2 and Case 3 who explicitly added an internal preparation phase in advance are managed by external managers on top and on middle level. Therefore, an overconfidence bias could be assumed in the cases, where owner- managers are responsible at top management level. Even an external middle manager in Case 1 was not able to identify or influence that bias. Cases that were managed by external managers assumed a more realistic duration of the refinancing process. But even in these cases, not every company included an appropriate internal preparation phase for such refinancing.

A different situation was identified when studying the cases that had to cope with delays caused by internal issues in section 5.3.4.2. Table 5.19 links the delays identified with manager type and form of the financing strategy.

Table 5.19: Financing Strategy, Manager Type and internal Delays

Case Form of the financing

strategy

Interview partners Delay(s)

1 Partly formulated/

Communicated and agreed

Top: Owner-manager

Middle: External manager

 Missed to setup supervisory board meeting to approve financing proposals

 Missed to align managers in

subsidiaries to inform about the signing process

2 Communicated and agreed Top: External manager

Middle: External manager

 Managers and advisors missed to coordinate internal board meetings and milestone for the external process

5 Formulated Top: External manager

Middle: External manager

 Managers missed to coordinate internal board meetings and milestone for the external process

7 Communicated and agreed/

“Lived experience”

Top: External manager

Middle: External manager

 Missed to align managers in

subsidiaries to inform about the signing process

Source: Own illustration.

Delays in the process were only found in cases, where external managers were involved. Three out of the four cases with internal process delays were led by external managers. Some of the managers had prior external job experience. A potential explanation could be that owner-managers have a more direct link to the shareholders (Ampenberger et al., 2013). An overconfidence effect is not directly observable, but could only be indicated in external manager cases.

No other variables served as a potential explanation for this observation, as these delays were found in literal as well as in theoretical replication cases. They were also detected in cases across shareholder generations and company size.

5.4.2.2 Representativeness

The second heuristic, representativeness, is explored in the financing process

(a) via mechanisms that the management team executed in order to obtain an overview on the financing markets prior to executing the own refinancing and (b) by assessing options to limit information asymmetries with the potential

external financing partners by providing an external rating or other instruments.

Enhancing transparency towards external financing partners via instruments like an external rating has already been identified to be primarily driven by the preferred financing instrument and only found in Case 5. No external rating initiative was investigated in cases, where syndicated loans or bilateral loans were used as primary refinancing instrument. An external quality assessment for Schuldscheindarlehen can be achieved by the application at the European Central Bank. These loans can be used by the investor to be pledged for refinancing purposes. Therefore, the proposal by Börner et al., (2010) that the management should use an external rating pro-actively is still missed in this refinancing situation.

An assessment of the conditions in the financing markets by inviting several financing partners to present solutions or by introducing financial advisors was performed by Case 1 to Case 4 and Case 6. However, only in Case 4 the financial advisor introduced new banks or other financing partners to the company. In the other cases, the company management already developed a list of banks to be invited to present refinancing proposals, primarily consisting of existing lenders or banks that already had a prior lending relationship to the firm. The inclusion of external financing advisors is therefore seen primarily not to introduce new financing partners to the companies or to present alternative financing sources. They supported in the execution of the process, assisted in the negotiation phase of the refinancing and benchmarked terms and conditions offered by the banks.

All cases investigated were primarily relying to personal experience and proposals from banks which could indicate a representativeness bias across all cases. Two exceptions have to be considered. (a) Cases that involve financial advisors to benchmark terms and to support in the negotiation tried to mitigate this bias at least in a later stage in the process. (b) Following the results from Lichtblau & Utzig (2002), the focus on relationship lending in Case 6 and Case 7 can be seen as rational as these firms mitigate asymmetric information problems. They avoid costly measures to overcome these asymmetries by continuing a long-standing relationship with their core bank(s).

5.4.3 Summary

Overconfidence and representativeness biases were not clearly attributable to owner- managers in all situations. The classification might be more complex than to solely differentiate between the shareholding impact and to focus on behaviour. In addition, only some determinants linked with specific capital structure theories were explainable. Probably a more strategic management typology can present a comprehensive framework for categorising midcap firms and their strategic approach towards financing. The basis for that assumption is that if business strategy influences financing strategy and if business planning connects with financing planning, could this approach also works towards financing decisions?