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Are divestitures really just the “flip side” of acquisitions? Both divestiture and acquisition are important processes for firm scope change. Frequently, these processes are considered to be “two sides of the same coin” wherein a divestiture is simply an acquisition performed “in reverse.” In contrast to this perspective, the authors submit that these two corporate strategic processes have fundamental differences in their motivations, implementation, and ramifications. Failure to recognize and address these differences could have serious consequences for firms, especially in the domains of capability development and deployment. In this chapter, the authors begin by recognizing the similarities between divestitures and acquisitions that have contributed to their “mirror image” reputations. The authors then identify and categorize the major differences between divestitures and acquisitions and explain how these distinctions can present significant challenges to firms when building and utilizing their corresponding divestiture and acquisition capabilities. Finally, the authors leverage these insights to develop not only suggestions for future research but also recommendations for firms to avoid succumbing to the fallacy of sameness between divestitures and acquisitions – and perhaps even successfully exploit it – when building, wielding, and honing the tools in their capability portfolios.

In order to overcome potential limitations in their own experience with a strategic action, firms will often outsource to expert firms that have greater experience with such actions. In this study, the authors contribute to theory on organizational experience and learning by examining an important but understudied type of experience – outsourced experience. The authors show whether, and under what conditions, such experience may be beneficial for focal firms. In the context of acquisitions, the authors find that outsourced acquisition experience brought to acquisition deals by advisors is typically assessed by markets to be detrimental but may become beneficial if such experience is specific to the acquirer’s context. Further, the authors find that acquirers’ own knowledge can signal that they are less reliant on advisor experience, thus mitigating its potentially harmful effects. Theoretical and practical implications of the results are discussed.

Serial acquirers take on multiple acquisitions as part of an acquisition program. Recently, serial acquirers have received scholarly attention from several streams of research. In this chapter, the authors review this research, focusing on the antecedents, processes, and performance of serial acquisitions. The authors develop a conceptual model that integrates the various streams of research. Based on this review, the authors argue that future research on serial acquirers should consider the complexity of integrating multiple acquisitions, by broadening the scope to include the organizational implications and long-term consequences when evaluating the performance of serial acquirers.

This extensive literature review critically examines the theoretical underpinnings of governance mode choices between strategic alliances and mergers and acquisitions (M&As). By synthesizing insights from transaction cost economics (TCE), resource-based view (RBV), social network theories, institutional theory, and real options theory, the author provides a holistic framework to guide decision-makers navigating the complex landscape of strategic decision-making. By meticulously exploring each theory and in-depth analysis of empirical findings, the author uncovers the consistency and inconsistency in the literature, shedding light on the multifaceted considerations that shape governance mode decisions and offer future research opportunities.

This study sheds new light on the personality trait and provides evidence regarding the relation between narcissism and desirable accounting practices, specifically the impact of CEO narcissism on accounting conservatism.

The authors test the relation between CEO narcissism and accounting conservatism for a sample of 907 US companies and their corresponding CEOs for the period between 2010 and 2018. The authors apply three established models of accounting conservatism and measure executives' narcissism using a non-intrusive approach ubiquitous in the literature.

The authors find that CEO narcissism is associated with speculative accounting practices in the form of timely recognition of positive news and more prudent financial reporting of anticipated negative news. The authors provide the first empirical evidence that, despite its well-known negative effects on corporate financial reporting, executive narcissism can also produce positive outcomes.

While managerial overconfidence has received much attention, the effects of executives' narcissism are still widely unexplored (Chatterjee and Hambrick, 2007). The authors thus contribute to the literature by investigating the relationship between CEOs' narcissism and accounting conservatism. The authors conjecture CEO narcissism should have a twofold effect on prudent financial reporting. On the one hand, CEOs' narcissism should be associated with low levels of unconditional conservatism due to excessively fast good news recognition. On the other hand, narcissistic executives should be associated with early recognition of negative news and hence with higher levels of conditional conservatism.

Using bibliometric techniques, the author analyzes a dataset of 276 articles on cross-border mergers and acquisitions (CBMAs) published in 13 management and international business journals. The author assesses the scientific impact and visualizes the intellectual landscape of research on CBMAs by analyzing publication and citation data and interconnections between publications. First, the author assesses annual publication trends and identifies highly cited articles and productive journals in the dataset that have significantly contributed to our understanding of CBMAs. Second, the author identifies main themes in recent research on CBMAs by focusing on frequently used keywords in publications. Third, the author identifies clusters of related research and explores their interrelationships to outline emerging trends, new perspectives, and directions for future research on CBMAs. Overall, this chapter contributes to the understanding of CBMAs by documenting the progress made to date and providing important insights for future research.

In multi-business firms, mergers and acquisitions (M&As) serve as a primary growth strategy. Yet, within multi-business firms, the value of an M&A can vary substantially for the different business divisions. Despite this, divisional-level drivers of corporate acquisition decisions and the subsequent performance implications for the divisions remain insufficiently explored. This study, grounded in the internal capital market and resource redeployment theories, seeks to fill this gap by investigating a sample of 1,728 multi-business firms spanning from 1998 to 2017. The statistical findings suggest that firms engage in acquisitions to allocate resources to their more promising divisions, particularly those with higher growth prospects and greater potential for resource sharing among sister businesses. A post-hoc analysis reveals that acquisitions are associated with a rise in the performance of those divisions that are in the same business segment as the acquisition target.

We call the attention of management scholars to the methodological traps inherent to data collected using self-reported emotional experience in the context of integration after mergers and acquisitions (M&A). In a systematic review, we identified 15 peer-reviewed empirical articles where authors discuss the impact of emotions in post-merger situations based on interview data. We found that the authors of 12 studies appear to have been unaware of the problems of the interview method or implicitly accepted the inherent and unavoidable distortions and biases of self-reported emotions over time. We argue that these distortions and biases represent threats to data validity and reliability. In support of this position, we cite literature suggesting it is difficult for researchers to reconstruct emotions experienced based on interviews conducted a few weeks after the events, so results based on this method may not be valid. The authors of these articles all relied on data collected several months or years after M&A integration events. Then, they sought to assess the impact of emotions at the time of the integration process. As a consequence, conclusions based on these data may be unreliable. We conclude with recommendations for overcoming this potential source of invalid data in post-merger integration (PMI) studies.