Sirkwoo Jin

(Girard School of Business, Merrimack College, North Andover, MA 01845, USA)

 

 

Abstract: The acquisition strategy is one of the most popular corporate strategies for growth. However, little is known about the effect of retaining the TMT of the acquired firm on the post-acquisition performance. Based on the market for the corporate control perspective and the resource-based view of the firm perspective, the present paper propose that there is a divergent effect of TMT retention on the post-acquisition performance according to the pre-acquisition performance of the target firm. Furthermore, it is proposed that (1) when TMT of the acquired firm represents knowledge-based resources and (2) when the acquisition occurs between successful and unrelated firms, the benefit of retaining the TMT of the acquired firm will increase. However, (1) when TMT of the acquired firm represents property-based resources and (2) when the acquisition occurs between unsuccessful and related firms, the benefit of replacing the TMT of the acquired firm will increase. Finally, theoretical and managerial implications are discussed, and future research directions are suggested.

 

 

Key words: acquisition; post-acquisition integration; top management team

 

JEL codes: M10, M12, M51