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The role of top managers in M&A: Reviewing thirty years of literature and setting directions for future research
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Entrepreneurship and innovation.
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Entrepreneurship and innovation.
Department of Management, Economics and Industrial Engineering, Politecnico di Milano.
(English)Manuscript (preprint) (Other academic)
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.

National Category
Business Administration
Identifiers
URN: urn:nbn:se:kth:diva-176412OAI: oai:DiVA.org:kth-176412DiVA: diva2:866810
Note

QS 2015

Available from: 2015-11-03 Created: 2015-11-03 Last updated: 2015-11-12Bibliographically approved
In thesis
1. Predicting who stays or leaves after the acquisition:: Target’s top manager turnover
Open this publication in new window or tab >>Predicting who stays or leaves after the acquisition:: Target’s top manager turnover
2015 (English)Doctoral thesis, comprehensive summary (Other academic)
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.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2015. 62 p.
Series
TRITA-IEO, ISSN 1100-7982 ; 2015:11
Keyword
Acquisition, CEO turnover, TMT turnover, coordination, Founder-CEO, Similarity attraction, Diversity
National Category
Business Administration
Identifiers
urn:nbn:se:kth:diva-176417 (URN)978-91-7595-767-8 (ISBN)
Public defence
2015-12-14, Kollegiesalen, Brinellvägen 8, KTH, Stockholm, 10:00 (English)
Opponent
Supervisors
Note

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

Available from: 2015-11-12 Created: 2015-11-03 Last updated: 2015-11-12Bibliographically approved

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CiteExportLink to record
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Citation style
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