The Influence of Governance Characteristics on the Strategic Response to a Failed Takeover Bid

Sayan Chatterjee, Jeffrey S. Harrison and Donald D. Bergh

Chapter 58 in Handbook of Top Management Teams, 2010, pp 499-502 from Palgrave Macmillan

Abstract: Abstract Firms that are governed effectively are less likely to have to make strategic changes during times of stress. We demonstrate this idea by examining changes to diversification strategy in target firms subsequent to failed takeover attempts. We found a lower incidence of refocusing in firms with lower levels of inside director ownership and higher levels of outside director stock ownership, both of which are an indication of board independence. The implication is that effective governance prior to the takeover attempt resulted in a diversification strategy that did not require change, even after a major shock.

Keywords: Strategic Management Journal; Target Firm; Board Independence; Strategic Change; Diversification Strategy (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-30533-5_59

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DOI: 10.1057/9780230305335_59

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