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.
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