Abstract
Economic growth in global M&A deals remained steady in 2022 at almost $4.7 trillion, post pandemic slowdown aside. Yet, 44-75% of these acquisitions will fail (Kitching, 1974; Marks & Mirvis, 2011; Schoenberg, 2006). Despite extensive research, there remains a lack of clarity about why these acquisitions fail, and how much can be attributed to human behaviour. Potentially, there is no more significant disruptor to organisations than an acquisition – bringing a quagmire of uncertainty for incumbent executives. Research indicates up to 70% of executives exit within five years post-acquisition (Krug & Aguilera, 2005), taking with them a wealth of institutional memory, relational capital, and intellectual property. Research which improves ones understanding of acquired executive behaviours will conceivably improve acquisition success rates.
The author takes an abductive approach to research design, using a constructionist epistemology and idealist ontology. ITL is a multifaceted and dynamic construct, yet these attributes remain understudied in a holistic manner. None consider whether these antecedents differ in the subsequent time periods post-acquisition. Exit trajectories are also absent. Thus, the author has developed the following research question. ‘What triggers executive ITL in post-acquisition exits? How and when does the exit unfold?’
Using a qualitative approach, 39 executives were identified utilising a stratified purposive sampling. Semi-structured interviews were conducted in three waves yielding narratives describing 58 incidents of acquisition experienced by participants. A hermeneutical method of interpretative analysis was used to develop findings. Emergent themes identified eight key exit antecedents as – (i) Conflict, (ii) Prior acquisition experience, (iii) Ambiguity tolerance, (iv) Turnover contagion, (v) Ostracism, (vi) Unfairness & perceived deprivation, (vii) Shock, and (viii) Reneged Commitments. This answers the ‘what’ part of the RQ. The author characterises the exit process from ignition of ITL post-acquisition through to exit, based on patterns of differential responses to the eight key antecedents. These findings answer the ‘how’ of the RQ. Objective and subjective temporal references inform to answer the ‘when’ part of the RQ. Findings are amalgamated and a temporal taxonomy is proposed outlining three exit pathways.
In terms of academic contribution, the paper advances the readers theoretical understandings on the sweet spot between executive behaviours, intention to leave and temporality in an M&A context. A Practitioner Toolkit is offered to improve executive retention rates has the potential to improve M&A outcomes by improving value. The practitioner is encouraged to look beyond the ‘one size fits all’ approach to executive exit behaviours post-acquisition