AN UPPER ECHELONS EXPLANATION OF ACQUISITION OUTCOMES

Patricia Doyle Corner, Angelo J. Kinicki

Research output: Contribution to journalArticle

5 Scopus citations

Abstract

The article applies upper echelon theory to explain variation in parent firms' post-acquisition financial performance. We develop and test a latent variable model hypothesizing that top management team (TMT) demographic diversity affects financial outcomes through teams' collective beliefs. In so doing we identify three constructs which potentially underlie classic TMT demographic diversity measures. Also, we propose two fundamental structural properties of team beliefs extrapolated from individual level cognitive complexity theory. Results show both positive and negative effects on financial outcomes from the TMT demographic diversity constructs through the belief constructs. We discuss the importance of including mediating constructs when attempting to unravel TMT diversity's effects on firm level outcomes.

Original languageEnglish (US)
Pages (from-to)83-120
Number of pages38
JournalAdvances in Mergers and Acquisitions
Volume4
DOIs
StatePublished - 2004
Externally publishedYes

ASJC Scopus subject areas

  • Business and International Management

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