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Doing a deal: Merger and acquisition negotiations and their impact upon target company top management turnover

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  • James P. Walsh

Abstract

This research investigates the effects of merger and acquisition negotiations on subsequent target company top management turnover. Three attributes of the companies and seven attributes of the merger and acquisition transactions are examined. The results indicate that the primary impact of negotiations is evident in the fourth year after a settlement date. When a buyer approaches an unrelated company that has been subject to previous takeover interest with a merger proposal, and an agreement is reached, the target'S management team is likely to experience abnormally high turnover 4 years later. Additional research ideas are suggested to help explain the sizeable turnover rates in the 3 years immediately following a merger or acquisition.

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  • James P. Walsh, 1989. "Doing a deal: Merger and acquisition negotiations and their impact upon target company top management turnover," Strategic Management Journal, Wiley Blackwell, vol. 10(4), pages 307-322, July.
    • Handle: RePEc:bla:stratm:v:10:y:1989:i:4:p:307-322
    DOI: 10.1002/smj.4250100402
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    Cited by:

    1. Ahammad, Mohammad Faisal & Tarba, Shlomo Y. & Liu, Yipeng & Glaister, Keith W. & Cooper, Cary L., 2016. "Exploring the factors influencing the negotiation process in cross-border M&A," International Business Review, Elsevier, vol. 25(2), pages 445-457.
    2. Saorín-Iborra, M. Carmen, 2008. "Time pressure in acquisition negotiations: Its determinants and effects on parties' negotiation behaviour choice," International Business Review, Elsevier, vol. 17(3), pages 285-309, June.
    3. Schweizer, Lars & Patzelt, Holger, 2012. "Employee commitment in the post-acquisition integration process: The effect of integration speed and leadership," Scandinavian Journal of Management, Elsevier, vol. 28(4), pages 298-310.
    4. Gada, Viswa Prasad & Popli, Manish & Malhotra, Shavin, 2024. "Geographic distance in cross-border acquisitions: The impact of CEO's psychological attributes," Journal of International Management, Elsevier, vol. 30(1).
    5. Krishnan, Hema A. & Park, Daewoo, 2002. "The impact of work force reduction on subsequent performance in major mergers and acquisitions: an exploratory study," Journal of Business Research, Elsevier, vol. 55(4), pages 285-292, April.
    6. Krishnan, Hema A., 2009. "What causes turnover among women on top management teams?," Journal of Business Research, Elsevier, vol. 62(11), pages 1181-1186, November.
    7. Ahammad, Mohammad Faisal & Tarba, Shlomo Yedidia & Liu, Yipeng & Glaister, Keith W., 2016. "Knowledge transfer and cross-border acquisition performance: The impact of cultural distance and employee retention," International Business Review, Elsevier, vol. 25(1), pages 66-75.
    8. McCarthy, Killian J. & Aalbers, Hendrik Leendert, 2016. "Technological acquisitions: The impact of geography on post-acquisition innovative performance," Research Policy, Elsevier, vol. 45(9), pages 1818-1832.
    9. Zhao, Yiran & Cai, Jianfeng, 2024. "Effects of M&A Type on Top Management Turnover: Moderating Role of Industry Similarity & Target Experience," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 1130-1144.
    10. Galasso, Alberto, 2010. "Over-confidence may reduce negotiation delay," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 716-733, December.
    11. Colombo, Massimo G. & Rabbiosi, Larissa, 2014. "Technological similarity, post-acquisition R&D reorganization, and innovation performance in horizontal acquisitions," Research Policy, Elsevier, vol. 43(6), pages 1039-1054.
    12. Timmers, A.D., 2010. "The perceived cultural changes and the changes in identification of the employees during a merger between two airlines," Other publications TiSEM a71f79cd-facf-445a-a0ba-4, Tilburg University, School of Economics and Management.

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