Donald D. Bergh

Predicting divestiture of unrelated acquisitions : An integrative model of ex ante conditions

The majority of unrelated acquisitions are divested shortly after their purchase. Often, those acquisitions-turned-divestitures result in strategic, organizational, and financial losses for both the acquiring and the acquired companies. To consider how such divestitures can be avoided, this study examined some of the differences between divested and retained unrelated acquisitions. The study integrated four explanations for why unrelated acquisitions occur and related them to the fates of such acquisitions. Unrelated acquisitions were hypothesized to be divested when they fail to realize some motives and expectations that prevailed at the time of acquisition. Two samples of unrelated acquisitions (135 from 1977 and 140 from 1987) were tracked over 5-year periods. The results indicate that motives and conditions at the time of acquisition, and changes in those motives and conditions, were related to the fates of the acquisitions. In addition, the relative importance of those factors varied across the periods studied. Discriminant analyses further demonstrate that most divestitures could be predicted correctly on the basis of those motivations and conditions. The implications of the findings are discussed.

Reconsidering the Reputation—Performance Relationship: A Resource-Based View

Reputation is thought to differentiate organizations and help explain variability in their performance. A recent study contributed to knowledge about the reputation—performance relationship by depicting reputation as having two dimensions and linking each dimension to the prominence and performance of U.S. business schools. The authors propose an alternative approach that draws on the resource-based view (RBV) wherein reputation is an intangible asset that is composed of complementary and reinforcing relationships whose synergies create causal ambiguities that have positive performance implications. The authors also test a direct effect of faculty experience on prominence. Their results support the merit of the RBV model, indicating that it offers greater explanatory power. The findings suggest that reputation cannot be bought by additive and independent investments. Instead, enhancing a reputation requires managers to carefully nurture interdependencies and complex relationships. The findings also provide new insights about the determinants of business school reputation.

Executive retention and acquisition outcomes: A test of opposing views on the influence of organizational tenure

This study considers the influence of retained acquired company top executives on the eventual outcome of corporate acquisitions. We test opposing views on how the organizational tenure of those executives could lead to the retention and divestiture of acquired companies. The Resource-based View (RBV) suggests that keeping acquired company top executives with longer organizational tenure will lead to more successful acquisition outcomes, as those executives have organization-specific knowledge that would facilitate effective implementation of the acquisition. By contrast, the Upper Echelons Perspective (UEP) suggests that retained top executives having short organizational tenure will lead to more successful outcomes, as they would have the adaptability to manage most effectively during the uncertainty and difficulty of the acquisition. Results of logistic regression analyses of 104 acquisitions followed over 5 years supported the RBV. Apparently, the benefits of long organizational tenure, such as more intimate understanding of the acquired company, lead to more successful outcomes than the benefits of short organizational tenure. The findings do not support the argument that drawbacks of long organizational tenure, such as commitment to the strategic status quo and rigidity, are detrimental after uncertainty and disruption. The results further suggest that one reason for the high frequency of acquisition failure might be because of the retention—and departures—of the wrong acquired company top executives.

Contingency Hypotheses in Strategic Management Research Use, Disuse, or Misuse?

The answer to many strategic management research questions is often summarized as “It depends.” Faced with the marginal results of many main effect hypothesis tests of one variable on another variable, strategy researchers began developing contingency hypotheses that explored more nuanced relationships involving multiple variables. Herein, the authors examine the development of contingency thinking in strategic management via a review of all empirical articles published in Strategic Management Journal from its inception in 1980 through 2009. Using Venkatraman’s framework, they identify all contingency studies within this sample. Their analysis reveals that, while contingency hypotheses are becoming more common, there is less diversity in the way the effects are tested. Additionally, while the framing of contingency hypotheses has become more sophisticated over time, there remain many opportunities for methodological improvements. Based on this content analysis, the authors offer both theoretical and methodological guidelines for future strategic management studies.

Research Methodology in Strategic Management Past Accomplishments and Future Challenges

Despite being a relatively young discipline, strategic management has grown dramatically in size and influence over the past few decades. As with any field, the findings generated within strategic management are only as robust as the research methods used to conduct the analyses. Although strategic managements accomplishments with regard to methods have been substantial, it is confronted by significant challenges as well. The authors describe these accomplishments and challenges, explain how the articles offered in this feature topic help to address certain challenges, and offer suggestions for future work that may create additional progress.

Product-Market Uncertainty, Portfolio Restructuring, and Performance: An Information-processing and Resource-Based View

The author investigates whether portfolio restructuring under-taken in response to changes in product-market uncertainty has implications for financial performance. A model that integrates information-processing and resource-based theories was applied to data from a panel of 168 Fortune 500 companies. Analyses show that product-market uncertainty is associated with two different types of restructuring strategies, which represent different theoretical approaches to portfolio restructuring. The results further show that portfolio restructuring actions influenced performance, and indicate when each restructuring strategy should be used to achieve the highest financial performance. Implications of these results for theory development are discussed.

Problems with Repeated Measures Analysis: Demonstration with A Study of the Diversification and Performance Relationship

This study reviews how repeated measures analysis has been applied and discusses alternative approaches for that type of analysis. A content analysis of 86 repeated measures studies showed a lack o...

New Frontiers of the Reputation—Performance Relationship: Insights From Multiple Theories

Understanding the influences on organizational performance is a key goal of the strategic management field. A prior study (Rindova, Williamson, Petkova, & Sever, 2005) offered significant progress toward this goal in the context of the concept of reputation through the application of multiple theories and alternate empirical tests. In a subsequent article (Boyd, Bergh, & Ketchen, 2010), the authors sought to extend that knowledge via the application of a third theoretical perspective and additional analyses. In this reply, the authors extend on the comments made by Rindova, Williamson, and Petkova (2010) and offer additional theoretical insights on reputation, leveraging ideas from the resource-based view, transaction cost economics, signaling theory, and social status research. The authors also attempt to lay a foundation for future inquiry by using those theories to identify a series of research questions.

Watch the Time Carefully: The Use and Misuse of Time Effects in Management Research

This article assesses how management researchers have used, and in some cases misused, time effects in their research designs, data analyses, and interpretations. Drawing from a content analysis of studies appearing in the Academy of Management Journal and Administrative Science Quarterly over the years 1988-1992, five different approaches for defining and operationalizing time effects are identified. Evaluation within and across these five approaches reveals three recurring patterns of “time series errors. ” The implications of these “errors “for studies with, and on time are provided.

Don’t “Waste” Your Time! The Effects of Time Series Errors in Management Research: The Case of Ownership Concentration and Research and Development Spending

The potential effects of “time series errors” in longitudinal analysis are examined empirically. Using a common hypothesis (the relationship between ownership concentration and research and development (RD (2) time series errors can have significant effects on empirical findings; and (3) the linkage between ownership concentration and R&D may not be as clear-cut as previous studies have suggested. Recommendations for how researchers should account, save, and tell their time are offered.