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Predicting who stays or leaves after the acquisition:: Target’s top manager turnover
KTH, Skolan för industriell teknik och management (ITM), Industriell ekonomi och organisation (Inst.), Entreprenörskap och Innovation.
2015 (engelsk)Doktoravhandling, med artikler (Annet vitenskapelig)
Abstract [en]

In acquisition of high-tech and knowledge intensive firms, scholars have paid special attention to top managers’ status after the deal. Literature suggests that these managers in particular CEOs if kept in post-acquisition provide coordination capacity for the acquirer to transfer the knowledge and technology from the target to the acquirer while minimizing the disruptive effect of post-acquisition integration process. In addition, the acquirer benefits from human capital embedded in target’s managerial resources; especially in high-tech and knowledge intensive firms where top managers are founders or patent holders. Although the above mentioned argument have been validated by empirical studies showing that top manager’s turnover reduces the post-acquisition performance for the acquirers, multiple empirical studies have reported abnormal managerial turnover shortly after the acquisition. This thesis made an attempt to explain this puzzling phenomenon by investigating on the determinants of the top manager’s turnover of the target in the post-acquisition period. The study finds that in case of CEOs, acquirers do not rely always on coordinating capacity provided by them in post-acquisition. Indeed, the acquirer’s choice of provision of coordination is beyond the target’s CEO retention. The choice of coordination depends on the existing level of coordination capacities and the acquisition’s motivation. In addition, founder-CEOs are more likely to stay after the acquisition because of their valuable firm-specific human capital for the acquirer. However, this value diminishes by the maturity of the target. In addition, similarity in demographic characteristics of the two CEOs (of the acquirer and target) causes social attraction, collaboration and cooperation which ultimately increases the chance that the target’s CEO retention. Finally, diversity within the target’s top management team (TMT) directly increases their chance of departure after the deal. The diversity engenders social frictions, conflicts and coordination inefficiencies.

sted, utgiver, år, opplag, sider
Stockholm: KTH Royal Institute of Technology, 2015. , s. 62
Serie
TRITA-IEO, ISSN 1100-7982 ; 2015:11
Emneord [en]
Acquisition, CEO turnover, TMT turnover, coordination, Founder-CEO, Similarity attraction, Diversity
HSV kategori
Identifikatorer
URN: urn:nbn:se:kth:diva-176417ISBN: 978-91-7595-767-8 (tryckt)OAI: oai:DiVA.org:kth-176417DiVA, id: diva2:867691
Disputas
2015-12-14, Kollegiesalen, Brinellvägen 8, KTH, Stockholm, 10:00 (engelsk)
Opponent
Veileder
Merknad

The Doctoral Degrees issued upon completion of the programme are issued by KTH Royal Institute of Technology, Stockholm, Sweden, Politecnico de Milano, POLIMI, Milan, Italy and Universidad Politécnicade Madrid, UPM, Madrid, Spain respectively.

QC 20151112

Tilgjengelig fra: 2015-11-12 Laget: 2015-11-03 Sist oppdatert: 2015-11-12bibliografisk kontrollert
Delarbeid
1. The role of top managers in M&A: Reviewing thirty years of literature and setting directions for future research
Åpne denne publikasjonen i ny fane eller vindu >>The role of top managers in M&A: Reviewing thirty years of literature and setting directions for future research
(engelsk)Manuskript (preprint) (Annet vitenskapelig)
Abstract [en]

The present paper reviews the literature on the role of top management teams (TMT) in mergers and acquisitions (M&A). Given variety of theoretical lenses applied in this field - such as agency theory or upper echelon – and the plethora of on-going empirical studies in the last three decades, we believe this literature review has a crucial value for the existing strand of studies and future studies to come. In particular, it systematizes the extant knowledge by documenting the contradictory results of prior empirical studies, making argument on the sources of these contradictions, and pointing out future directions of research.

HSV kategori
Identifikatorer
urn:nbn:se:kth:diva-176412 (URN)
Merknad

QS 2015

Tilgjengelig fra: 2015-11-03 Laget: 2015-11-03 Sist oppdatert: 2015-11-12bibliografisk kontrollert
2. Post-acquisition implementation of small high-tech firms: Looking beyond the surface
Åpne denne publikasjonen i ny fane eller vindu >>Post-acquisition implementation of small high-tech firms: Looking beyond the surface
(engelsk)Manuskript (preprint) (Annet vitenskapelig)
Abstract [en]

In post-acquisition, the main challenge for the acquirer is choosing the right coordination mechanism with respect to the required level of coordination and associated costs of implementation of the mechanism. In acquisition of small high-tech firms, the challenge is exacerbated as technology and knowledge transfer requires high level of coordination while the costs related such as loss of autonomy and organizational disruptions are also higher. In this paper, we showed that acquirer’s choice of coordination mechanisms is determined by the cost-benefit trade-off. In particular, we found that, component technology as a form of task interdependency necessitates higher level of coordination and justifies choosing mechanisms to provide high level of coordination at higher cost. On the contrary, technological relatedness and prior alliance between acquirer and target provide coordination capacity, which in turn reduce the benefits of choosing mechanisms to provide high level of coordination with respect to the associated costs. This study is based on empirical analysis of 403 acquisitions of small high-tech firms between 2001 and 2005. 

HSV kategori
Identifikatorer
urn:nbn:se:kth:diva-176413 (URN)
Merknad

QS 2015

Tilgjengelig fra: 2015-11-03 Laget: 2015-11-03 Sist oppdatert: 2015-11-12bibliografisk kontrollert
3. Antecedents of target CEO departure in post-acquisitions: The leading role of founder
Åpne denne publikasjonen i ny fane eller vindu >>Antecedents of target CEO departure in post-acquisitions: The leading role of founder
(engelsk)Manuskript (preprint) (Annet vitenskapelig)
Abstract [en]

This study investigates on firm specific human capital of target CEOs in small high-tech firms as the antecedent of their retention after the acquisition. The main finding of the paper is that acquirers are willing to keep the founder-CEOs because of their valuable embedded human capital. This value is to the extent that founder-CEOs compare to professional CEOs have a higher chance of retention when relatedness between acquirer and target is high or when the acquirer structurally integrates the target after the acquisition; the two conditions that general managerial skills and industry specific skills of the CEOs are not of interest for the acquirers. Also the value of firm specific human capital depends on the maturity of the target. The value diminishes as the target is more mature at the time of acquisition. This research is based on empirical analysis of acquisition of small high-tech firms between 2001 and 2005.

HSV kategori
Identifikatorer
urn:nbn:se:kth:diva-176414 (URN)
Merknad

QS 2015

Tilgjengelig fra: 2015-11-03 Laget: 2015-11-03 Sist oppdatert: 2015-11-12bibliografisk kontrollert
4. Similarity as an antecedentfor target’s CEO turnover: Do birds of a feather flocktogether?
Åpne denne publikasjonen i ny fane eller vindu >>Similarity as an antecedentfor target’s CEO turnover: Do birds of a feather flocktogether?
(engelsk)Manuskript (preprint) (Annet vitenskapelig)
Abstract [en]

This paper investigates on behavioral aspects of managerial turnover in post-acquisition period. In particular, the paper aims to determine to what extent demographic similarity between CEOs improves their (intergroup) relations which ultimately causes target’s CEO retention in post-acquisition. The paper found that similarity in demographic characteristics of CEOs increases the probability of announcing the retention of target’s CEO after the deal is closed. Additionally, similarity increases the probability of misjudgment in determining target’s CEO status in post-acquisition period. Finally, the paper found that experience as the acquirer’s capability reduces the effect of similarity. This results is based on acquisition of small high-tech firms between 2001 and 2005.

HSV kategori
Identifikatorer
urn:nbn:se:kth:diva-176415 (URN)
Merknad

QS 2015

Tilgjengelig fra: 2015-11-03 Laget: 2015-11-03 Sist oppdatert: 2015-11-12bibliografisk kontrollert
5. Why diverse top managementteams break up in post-acquisition periods
Åpne denne publikasjonen i ny fane eller vindu >>Why diverse top managementteams break up in post-acquisition periods
(engelsk)Manuskript (preprint) (Annet vitenskapelig)
Abstract [en]

This paper proposes a complementary explanation behind the turnover of target’s top managers in post-acquisition periods. Although human capital and acquisition implementation literature describe managerial retention as desirable, empirical studies have reported significant managerial turnover in acquisition of high-tech and knowledge intensive firms. Borrowing some insights from the team diversity literature, the paper examines the ex-ante diversity among top managers of knowledge-intensive and high-tech firms as an antecedent of their turnover in post-acquisition. We argue that diversity reduces the coordination efficiency necessary to transfer knowledge and facilitate post-acquisition organizational integration, and managers belonging to such teams are more likely to be replaced. Empirical analysis drawing on 2164 top managers in 297 Swedish firms shows that managerial position diversity as a separation, pay disparity and industrial tenure diversity as a variety indeed are associated with managerial exit in three years after the acquisition.

HSV kategori
Identifikatorer
urn:nbn:se:kth:diva-176416 (URN)
Merknad

QS 2015

Tilgjengelig fra: 2015-11-03 Laget: 2015-11-03 Sist oppdatert: 2015-11-12bibliografisk kontrollert

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