Good learners: How top management teams affect the success and frequency of acquisitions

Authors

  • Anna Nadolska,

    Corresponding author
    1. Department of Strategic Management and Entrepreneurship, Rotterdam School of Management, Erasmus University, Rotterdam, The Netherlands
    • Correspondence to: Anna Nadolska, Department of Strategic Management and Entrepreneurship, Rotterdam School of Management, Erasmus University, P.O. Box 1738 3000 DR, Rotterdam, The Netherlands. E-mail: anadolska@rsm.nl

    Search for more papers by this author
  • Harry G. Barkema

    1. Department of Strategic Management and Entrepreneurship, Rotterdam School of Management, Erasmus University, Rotterdam, The Netherlands
    2. Department of Management, London School of Economics, London, U.K.
    Search for more papers by this author

Abstract

We develop new theory and hypotheses on how a firm's top management team learns from acquisition experience, why, in consequence, the composition of the team is crucial, and how this affects acquisition frequency and success. We focus on the diversity of the top team and argue that heterogeneous teams, as compared to homogenous ones, acquire less but benefit more from their acquisition experience and are more successful with their acquisitions because they avoid mis-transferring their experiences. We tested our hypotheses on acquisition frequency and success using longitudinal data on more than 2,000 acquisitions by 25 Dutch companies over four decades (1966 to 2006). Copyright © 2013 John Wiley & Sons, Ltd.

Ancillary