Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The big exit: executive churn in the wake of M&As

The big exit: executive churn in the wake of M&As Purpose – The purpose of this paper is to report the results of a ten‐year study on the effects of mergers and acquisitions (M&As) on target company executives and discusses the importance of managing leadership issues during the merger integration process. Design/methodology/approach – We followed the careers of more than 23,000 executives in over 1,000 target firms during a 17‐year period surrounding the acquisition. We then compared trends in executive turnover rates before and after the acquisition to understand the long‐term leadership effects of M&As. Findings – Target company executive teams are generally stable before they are acquired. Following acquisition, however, firms can expect to lose 21 percent or more of their executives each year – more than double that experienced in non‐merged firms – for at least ten years after the acquisition. Practical implications – Results show that M&As destroy whatever leadership stability target firms may have had prior to acquisition. The problem is to identify leadership instability when it occurs, understand the underlying causes, and take action to restore leadership stability in ways that increase decision making effectiveness and enhance long‐term performance. Originality/value – In total, roughly ten years were spent compiling the data reported in this study. Given the labor intensity and length of time needed for such an effort, it is highly unlikely that a comparable database will be compiled again in the near future. This creates a unique opportunity to generate deeper insights into a variety of top management team issues in M&As that can be leveraged to improve the effectiveness of post‐merger integration engagements. We expect a variety of insightful findings to emerge as we continue to analyze these data and will report in future articles. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Business Strategy Emerald Publishing

The big exit: executive churn in the wake of M&As

Jeffrey A. Krug; Walt Shill
Journal of Business Strategy , Volume 29 (4): 7 – Jul 4, 2008
Download PDF
7 pages

Loading next page...
 
/lp/emerald-publishing/the-big-exit-executive-churn-in-the-wake-of-m-as-dIYMkMHP5G
Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
0275-6668
DOI
10.1108/02756660810886962
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to report the results of a ten‐year study on the effects of mergers and acquisitions (M&As) on target company executives and discusses the importance of managing leadership issues during the merger integration process. Design/methodology/approach – We followed the careers of more than 23,000 executives in over 1,000 target firms during a 17‐year period surrounding the acquisition. We then compared trends in executive turnover rates before and after the acquisition to understand the long‐term leadership effects of M&As. Findings – Target company executive teams are generally stable before they are acquired. Following acquisition, however, firms can expect to lose 21 percent or more of their executives each year – more than double that experienced in non‐merged firms – for at least ten years after the acquisition. Practical implications – Results show that M&As destroy whatever leadership stability target firms may have had prior to acquisition. The problem is to identify leadership instability when it occurs, understand the underlying causes, and take action to restore leadership stability in ways that increase decision making effectiveness and enhance long‐term performance. Originality/value – In total, roughly ten years were spent compiling the data reported in this study. Given the labor intensity and length of time needed for such an effort, it is highly unlikely that a comparable database will be compiled again in the near future. This creates a unique opportunity to generate deeper insights into a variety of top management team issues in M&As that can be leveraged to improve the effectiveness of post‐merger integration engagements. We expect a variety of insightful findings to emerge as we continue to analyze these data and will report in future articles.

Journal

Journal of Business Strategy – Emerald Publishing

Published: Jul 4, 2008

Keywords: Acquisitions and mergers; Senior management; Leadership

References

  • Why do they keep leaving?
    Krug, J.A.