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This paper reviews the evolving literature on top management team effects in mergers and acquisitions (M&As). Existing research has focused on understanding why incumbent top managers depart at higher rates than normal following an acquisition and why high turnover rates have negative postacquisition performance effects. We explore two new areas of inquiry. First, we discuss the role of newly hired executives – executives hired after the acquisition. Our research indicates that executives who join target companies after an acquisition also depart more quickly than executives who join companies not previously involved in an acquisition. Acquisitions appear to create long-term instability in the target firm’s top management team – both incumbent and new-hire executives depart at higher rates than normal well into the future. Integration of the target firm often intensifies instability within the target company’s top management team. This instability affects performance and leads to further integration efforts as the firm attempts to improve performance. These additional integration activities, in turn, lead to even higher subsequent executive turnover. Second, we examine the topic of director turnover and propose a theoretical framework for understanding the relationship between acquisitions and director retention. Future research that considers the role of directors as well as executives may lead to deeper insight into the nature of turnover and integration effects in mergers and acquisitions.

Purpose – We investigate the impact of CEO turnover on performance and accounting-based outcomes following major business restructurings.

Design/Methodology/Approach – We analyze a sample of 217 major operational restructurings during the period 1999–2007 using regressions and other statistical tests.

Findings – We document significant improvements in postrestructuring operating and investment efficiencies with little differentiation between restructurings that involve a change in CEO and those that involve continuing CEOs. However, we find evidence of lower accounting quality for the continuing CEO firms. First, restructuring charges of CEO turnover firms are associated with lower current period unexpected core earnings and higher future period unexpected core earnings (lower levels of classification shifting). Second, CEO turnover firms have a significantly lower percentage of (i) restructuring charge reversals and (ii) prereversal shortfalls (in meeting analyst forecast estimates) followed by reversals (suggesting lower levels of subsequent earnings management). Therefore, turnover CEOs are less likely to manipulate restructuring charges to mask true economic performance than continuing CEOs. Overall, our evidence suggests continuing CEOs undertake less substantial restructurings, while opportunistically reporting similar charges and performance improvements, consistent with attempts to pool with new CEO hires to keep their jobs.

Originality/Value – Overall, our results highlight the key economic role played by top corporate managers in major business restructurings, suggesting that CEO turnover leads to both real changes in managerial actions and altered reporting incentives.

Resource redeployment may occur when a firm exits from one line of business and enters another. We suggest that when multiproduct firms identify opportunities in new high-growth markets, their entry will occur alongside exit from low-growth markets when the firm is resource-constrained. For our sample of over 47,000 high-tech US firms in CorpTech from 1993 to 2004, 5% of the firm-years include simultaneous entry and exit at the product market level, which we term “product turnover.” Firms are more likely to engage in product turnover when there is a larger spread between the highest and lowest growth rates for the product markets in the firm’s portfolio. This effect is strongest for small- and medium-sized firms, which tend to be privately held. Therefore, future research on resource redeployment might find fruitful ground in samples of mid-size firms.

Guided by social exchange theory and signaling theory, this chapter investigates the relationship between individual perceptions of high-performance work systems (HPWS), union instrumentality, and employees’ turnover intention. The results obtained from a multilevel and multisource sample of more than 1,300 employees in 37 multinational corporation based in China show that, in contrast to our hypothesis, union instrumentality is not directly related to turnover intention; rather, the results from the post hoc mediation analysis show that union instrumentality is indirectly and negatively related to turnover intention through affective organizational commitment. Consistent with our hypothesis, the results of our analysis show that union instrumentality serves as an important contingent factor in the relationship between HPWS and employee turnover intention. The relationship between HPWS and turnover intention becomes positive when employee union instrumentality is low.

Firms pursue merger and acquisitions in order to gain valuable resources from acquired companies, including employee-held know-how and culture. This study aims to identify reasons employees choose to stay or leave in reaction to acquisitions. Seventeen employees involved in two major acquisitions in the software industry were interviewed for this qualitative study that goes beyond classical turnover variables to indicate that turnover or retention decisions depend on highly critical acquisition-specific variables such as leadership behavior, contact with new colleagues, or appreciation from the acquirer. We develop an acquisition-specific turnover model as a basis for further research on acquisition-specific turnover and to provide guidelines for practitioners dealing with retention and turnover during acquisitions.

Employee turnover is a growing challenge for health-care providers delivering patient care today. US population demographics are shifting as the population ages, which leaves the field of health care poised to lose key leaders and employees to retirement at a time when patient care has grown more complex. This means health care will lose its core of key employees at a time when skilled leadership and specialized knowledge is most needed and directly impacts health care's ability to deliver quality care. Operational succession planning (OSP) may be one solution to manage this looming challenge in health care, as the process identifies and develops the next generation of leadership. Thus, this exploratory national study used a quantitative and cross-sectional design to examine the relationship between OSP and employee turnover. Demographic and 10-point Likert scale data were collected from n = 66 medical practices, using an online survey instrument. Data were analyzed using various descriptive and inferential statistical methods. Distribution (frequency and chi-square) analyses of the study sample, one-way analysis of variance (ANOVA), and regression analyses were performed across seven demographic characteristics of the medical practices: Specialty, Ownership Structure, Number of full-time equivalent (FTE) Physicians, Number of FTE Clinical Employees, Number of FTE Nonclinical Employees, Number of FTE Employees Left Position, and Region. Study results provided statistically significant evidence to support the relationship between OSP and employee turnover, highlighting that OSP was associated with lower employee turnover. The finding suggests that OSP can serve as an effective mechanism for increasing employee retention.

We investigate outcomes associated with the turnover of unskilled workers, isolating its effects on revenue, cost, and profit. Little attention from researchers has been given to unskilled workers, a significant portion of the workforce.

This study investigates the relation between turnover among unskilled workers and financial performance using data from 527 hotels owned by the same lodging chain. The workers in our sample are full-time housekeepers and front desk attendants.

We find that the relation between turnover and performance differs by turnover type (voluntary vs. involuntary) and category of unskilled worker, reiterating the need to differentiate between turnover type and the importance of context in studying turnover. We challenge the assumption that voluntary turnover is categorically harmful and our results for front desk attendants support the view that organizations choose turnover levels that maximize performance. We also provide new evidence on the effects of involuntary turnover. Contrary to the established notion that dismissing less able employees should improve performance, we find that involuntary turnover has negative consequences.

Our results demonstrate the importance of distinguishing voluntary turnover from involuntary turnover and the need to include both in models predicting turnover’s performance effects.

The present study investigates whether companies that exhibit high performance characteristics in the pre-financial crisis period can maintain their high performance in the financial crisis period of 2007–2009 and, in particular, the post-financial crisis period of 2010–2011.

The current study of 1,473 companies in 25 countries and 66 industries (MSCI index) (1) extends the empirical research of prior studies through the year 2011; (2) identifies the operating characteristics (performance drivers and performance measures) and associated risk factors which were most critical with regard to sustaining, exiting, and entering HPC companies during the five 10-year periods since 1998–2007, and (3) summarizes conclusions about HPC results from the 13 ten-year periods (1989–1998 to 2002–2011) in this stream of research.

(1) Companies that sustain high performance over periods of financial stress clearly excel in asset turnover performance driver and on the performance measures of growth in revenues, profit margin, return on equity and return on assets. Sustaining HPC had less debt than other companies and consistent cash flow yields. Operating turnover ratios became less important in recent years as an indicator of high performance. (2) Although exiting companies maintained profitability, financial risk and liquidity, the key factor in their dropping out of HPC status is their failure to grow revenues. (3) Entering companies did not exhibit the superior performance in all categories.

The results provide strategic direction for management of companies that aspire to HPC status and to maintain HPC status once gained, particularly in times of global financial stress.

The “war for talent” is not limited to developed economies but has become a common feature in emerging economies such as India. From the sociocultural perspective, India represents one of the oldest cultural heritages with distinct cultural values. The cultural difference may contribute to explain organizational practices toward talent retention. In the present chapter, the authors focus on the institutional, legal, and cultural context and highlight their uniqueness with respect to the Indian context. Within the institutional context, the authors found that prior to liberalization (which happened in 1990s), the Indian business scene was dominated by public firms or a small enclave of private firms. For both types of organization, turnover hardly mattered, and turnover was indeed negligible. Employees saw firms as “employers for life”: in such a context, voluntary turnover was extremely rare. Further, in the early legal context, it was hard for any private firm to “fire” an employee. Therefore, involuntary turnover was close to nil as well. Things began to change post-liberalization when the Indian scene was dominated by an influx of private players. The Indian mind too accepted turnover to be a part of the corporate life. In the present chapter, the authors provide a snapshot of what, why, and how of employee turnover in the Indian context. The authors specifically focus on what motivates employees to remain with the organization or why do they leave the organization. The authors close the chapter with insights relevant to both academicians and practitioners.

The authors review the German voluntary turnover literature and examine how it reflects and extends the overall knowledge of employee turnover. First, the authors describe legal, institutional, and cultural influences specific to Germany that may affect voluntary turnover and its relationships with antecedents and outcomes. The authors then explain how research paradigms, which in German turnover research are primarily embedded in sociology and labor economics and to a lesser degree psychology and management, affect the lens by which voluntary turnover is examined. For instance, the variety of research perspectives leads to a variety of research questions, theories, data, and methodological approaches. Using these diverse perspectives, the authors explain how measurement and data quality concerns may hamper the understanding of turnover in cross-country/cross-cultural comparisons. This review further reveals many similarities with US-based turnover research, regarding the theories, methods, and results. The authors also find that turnover levels are, on average, considerably lower in Germany than in Anglo-Saxon labor markets. The authors suggest that the industry structure in Germany, coined by its strong and traditionally organized “Mittelstand” companies, may partly drive these findings. The authors close by identifying several research opportunities, available through advances in technology to improve the matching process, nonstandard work arrangements (such as in the gig economy), and a broader perspective on institutional peculiarities.