Affiliation:
1. Department of Management and Organization, The Pennsylvania State University, Smeal College of Business Administration, University Park, PA 16802, USA
Abstract
This study considers the influence of retained acquired company top executives on the eventual outcome of corporate acquisitions. We test opposing views on how the organizational tenure of those executives could lead to the retention and divestiture of acquired companies. The Resource-based View (RBV) suggests that keeping acquired company top executives with longer organizational tenure will lead to more successful acquisition outcomes, as those executives have organization-specific knowledge that would facilitate effective implementation of the acquisition. By contrast, the Upper Echelons Perspective (UEP) suggests that retained top executives having short organizational tenure will lead to more successful outcomes, as they would have the adaptability to manage most effectively during the uncertainty and difficulty of the acquisition. Results of logistic regression analyses of 104 acquisitions followed over 5 years supported the RBV. Apparently, the benefits of long organizational tenure, such as more intimate understanding of the acquired company, lead to more successful outcomes than the benefits of short organizational tenure. The findings do not support the argument that drawbacks of long organizational tenure, such as commitment to the strategic status quo and rigidity, are detrimental after uncertainty and disruption. The results further suggest that one reason for the high frequency of acquisition failure might be because of the retention—and departures—of the wrong acquired company top executives.
Subject
Strategy and Management,Finance
Cited by
108 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献