Effects of power characteristics of acquiring and target firm top management teams on post-acquisition performance in concentric merger and acquisitions

K. Blaine Lawlor, Bradley J. Olson and Satyanarayana Parayitam

International Journal of Human Rights and Constitutional Studies, 2022, vol. 7, issue 1, 52-68

Abstract: With the spending and failure rates of mergers and acquisitions (M%As) showing no signs of abating, strategy researchers must gain a better understanding of which factors enhance the likelihood of M%A success. We build on the M%A literature emphasising the critical role of top managers of both firms in influencing the combined firm's ability to realise a myriad of deal benefits. Drawing upon the resource based view and resource dependency theory, we offer a conceptual model which shows the effects of resource characteristics possessed by the top management team (TMT) of the acquiring and target firms on both the composition of the combined firm's TMT and its post-deal performance. Two resource characteristics emphasised are reputation-based resources as reflected in the prestige power of the respective TMTs and knowledge-based resources as denoted by the expert power of the respective TMTs. Our conceptual model offers avenues for empirical research to examine the effect of power on target executive retention and post-acquisition performance. Implications for strategic management are discussed.

Keywords: top management team; TMT; mergers and acquisitions; M%As; CEO power. (search for similar items in EconPapers)
Date: 2022
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