Managing risk in mergers and acquisitions activity: beyond ‘good’ and ‘bad’ management

Alnoor Bhimani, Mthuli Ncube and Prabhu Sivabalan

Managerial Auditing Journal, 2015, vol. 30, issue 2, 160-175

Abstract: Purpose - – This paper aims to assess the impact of the presence/absence of risk management practices on the risk of merger and acquisition (M&A) failure. Design/methodology/approach - – An agency theoretic perspective is adopted, along with a mixed-methods approach to study managerial complexity beyond simply “good” and “bad”. The focus is on an agency conflicts. Findings - – The authors first present an integrated framework that classifies managerial behaviour and risk management, where M&A bids can become vehicles for maximising managerial benefits rather than shareholder value. The authors proceed to consider M&A activity that benefits both managers and shareholders in the presence of risk management strategies. Research limitations/implications - – The paper highlights the benefits of multiple paradigms and research paths that address dimensions captured by an agency theoretic perspective. Practical implications - – The authors regard this paper as having particular significance in that the global financial crisis has impacted M&A activities and objectives, shifting the employment and related risks faced by managers. Originality/value - – The paper suggests future research paths to advance the understanding of the complex behaviour of managers involved in M&A activities that go beyond the classification of “good” and “bad” managers.

Keywords: Risk management; Agency conflicts; Agency theory; Mergers and acquisitions (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eme:majpps:maj-08-2014-1079

DOI: 10.1108/MAJ-08-2014-1079

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