AN UPPER ECHELONS EXPLANATION OF ACQUISITION OUTCOMES
Advances in Mergers and Acquisitions
ISBN: 978-0-76231-172-9, eISBN: 978-1-84950-323-5
Publication date: 1 January 2004
Abstract
The article applies upper echelon theory to explain variation in parent firms’ post-acquisition financial performance. We develop and test a latent variable model hypothesizing that top management team (TMT) demographic diversity affects financial outcomes through teams’ collective beliefs. In so doing we identify three constructs which potentially underlie classic TMT demographic diversity measures. Also, we propose two fundamental structural properties of team beliefs extrapolated from individual level cognitive complexity theory. Results show both positive and negative effects on financial outcomes from the TMT demographic diversity constructs through the belief constructs. We discuss the importance of including mediating constructs when attempting to unravel TMT diversity’s effects on firm level outcomes.
Citation
Doyle Corner, P. and Kinicki, A.J. (2004), "AN UPPER ECHELONS EXPLANATION OF ACQUISITION OUTCOMES", Advances in Mergers and Acquisitions (Advances in Mergers and Acquisitions, Vol. 4), Emerald Group Publishing Limited, Leeds, pp. 83-120. https://doi.org/10.1016/S1479-361X(04)04004-9
Publisher
:Emerald Group Publishing Limited
Copyright © 2004, Emerald Group Publishing Limited