Mergers and Acquisitions: Turmoil in Top Management Teams (Strategic Management Collection)

Mergers and acquisitions can be tumultuous for executives. Target companies can expect to lose close to 40 percent of their top management team within two years after acquisition. Executives who stay often lose status and autonomy and view their company's acquisition as detrimental to themselves both personally and professionally. It is common for acquiring firms to replace target executives with their own shortly after an acquisition. The evidence, however, shows clearly that doing so leads to lower target company performance. Why, then, are acquiring firms so quick to replace target company executives after an acquisition? This book provides executives with an in-depth look at the consequences of M&As for acquired top management teams. It examines M&As as a corporate growth strategy, the importance of top management teams to a firm's long-term performance, the reasons why executives depart after an acquisition, and the effects of these departures on target company performance. It then discusses when executive turnover may be desirable or undesirable and how acquiring firms can more effectively manage target company executive teams during the integration process. An understanding of these leadership issues will play an important role in determining merger success.

Jeffrey A. Krug received his Ph.D. in strategic management from Indiana University and his M.S. in international business and B.A. in economics from The Pennsylvania State University. Before entering academia, he held a number of management positions with PepsiCo, Texas Instruments, Commerzbank AG, and the Austrian Postal Savings Bank. He has taught in a variety of executive and international programs at Penn State, Indiana University, University of Illinois, Virginia Tech, and William & Mary.