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Overcoming biases in M&A: A process perspective

Advances in Mergers and Acquisitions

ISBN: 978-0-85724-465-9, eISBN: 978-0-85724-466-6

Publication date: 21 December 2010


Mergers & acquisitions (M&A) are an important element of any company's growth plan. However, the actual performance of most M&A activity fails to live up to the expectations of the acquirers. The psychological biases that affect decision-making have been posited as a source of this disappointing performance. The broad strokes in which these biases have been offered up as explanation for M&A failure don't offer much insight into the specific causes, and therefore the actions business leaders can take to mitigate their impact. We review a 4-step M&A process, identify the different biases that affect the different stages, and then offer practical debiasing techniques targeted at that particular stage of the decision-making process. This targeted debiasing can help business leaders find practical solutions to this vexing problem. Finally, we review two biases that motivate decision makers to avoid pursuing M&A deals at all – to the detriment of achieving their growth targets.


Garbuio, M., Lovallo, D. and Horn, J. (2010), "Overcoming biases in M&A: A process perspective", Cooper, C.L. and Finkelstein, S. (Ed.) Advances in Mergers and Acquisitions (Advances in Mergers and Acquisitions, Vol. 9), Emerald Group Publishing Limited, Leeds, pp. 83-104.



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