Abstract
The effects of degree of cultural and strategic similarity on the preference for a potential merger candidate were investigated. The main objective of the study was to test predictions based on the similarity-attraction hypothesis, Bryne and Clore's (1970) reinforcement-affect model, and social identity theory in the context of mergers. Ninety senior managers were asked to imagine that they were chief executive officers of a stimulus company. They read a description of their "own" company and the companies of two potential merger candidates. Next, they were asked to express their willingness to merge with each of the other companies and to assess the probability of success as well as the amount of resistance within their company to such a merger. A 2 (Merger Candidate Strategic Aspects: Similar vs. Complementary) x 3 (Degree of Discrepancy Between Departments Within the Companies: Low vs. Moderate vs. High) x 2 (Merger Candidate Cultural Aspects: Similar vs. Dissimilar) x 2 (Level of Integration Required: Low vs. High) design was employed with within-subject measures on the last two factors. The results show that managers prefer the culturally similar candidate, particularly under conditions of high integration. With respect to strategic aspects, managers prefer the similar partner to the slightly complementary one, but if the partner is moderately or strongly discrepant, they are more positive about the complementary partner. The results of this study give considerable support to the reinforcement-affect model.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.