Study about Dimensions of Management Style Compatibility and Cross-Border Acquisition Outcome
Abstract:~ This paper examines how differences in management styles impact the performance of cross-border acquisitions. Two principal findings are reported. First, the study focuses on the individual dimensions of management style and highlights the particular influence that differences in risk orientation exert on acquisition outcome. This result, although unexpected, is argued to be consistent with prior literature that places risk orientation in a central role within organisational behaviour. Second, the relationship between management style compatibility and cross-border acquisition performance is found to be contingent upon the level of organisational interaction imposed by the post-acquisition process. Implications are drawn for both researchers and practitioners.
Introduction:~ Recent years have seen a marked increase in cross-border acquisition activity as firms pursue growth via geographical diversification. Cross-border acquisitions have become the dominant means of internationalisation, accounting for approximately 60% of all foreign direct investment inflows (Hopkins, 1999). Yet, empirical studies draw attention to the mixed performance record of such acquisitions. While some researchers have reported that cross-border acquisitions create marginally positive abnormal returns for the shareholders of the acquiring firm (Seth et al., 2000), others have found negative shareholder wealth effects. keep reading…
