Chief executive officer personality and company merger and acquisition activity: A multimethod investigation.
Item
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Title
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Chief executive officer personality and company merger and acquisition activity: A multimethod investigation.
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Identifier
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AAI9130366
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identifier
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9130366
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Creator
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Rovenpor, Janet Linda.
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Contributor
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Adviser: Abraham K. Korman
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Date
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1991
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Language
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English
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Publisher
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City University of New York.
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Subject
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Business Administration, Management | Business Administration, General | Psychology, Personality | Psychology, Industrial
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Abstract
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The purpose of this dissertation is to: (1) study CEO personality using a multimethod research strategy, (2) examine the role that a CEO's personality plays in encouraging companies to engage in merger and acquisition activity (MAA), and (3) test the moderating influence that two organizational variables, a company's cash reserves and fear of being a takeover target, have on the relationship between CEO personality and MAA. Strong agreement among different methods used to measure the same personality constructs--content analysis of CEO speeches, questionnaires sent to CEOs, the unobtrusive measures found in CEO biographies and annual reports--was not found. It is concluded that all three methods are valid: self-report questionnaires appear to measure a CEO's consciously-held beliefs and self-reflections on his/her personal motives while content analysis of speeches and other unobtrusive methods seem to tap unconscious aspects of personality.;Results of statistical analyses indicated that high levels of the need for power were strongly associated with high levels of MAA; high levels of the belief that "bigger is better" were moderately associated with high levels of MAA; high levels of the belief in synergy also were moderately associated with high levels of MAA. Weak relationships were found between beliefs in the benefits of acquisitions and MAA, self-confidence and MAA, desire to manage impressions and MAA, and fear of negative evaluation and MAA. Little information was obtained regarding cause and effect relationships between CEO personality and MAA. Subgroup analyses revealed that cash reserves and fear of being a takeover target did not significantly influence the relationship between CEO personality and MAA. Cash reserves, however, were strongly correlated, in a positive direction, with MAA.;The dissertation's significance lies in the development of a predominantly psychological model to explain MAA. In light of the many acquisition failures of the 1980's, a model attributing MAA to the personality of CEOs may be more descriptive of how acquisitions are made than typical financial or strategic models. It is hoped that CEOs will become more effective decision makers once they understand the role that their personalities play in formulating merger and acquisition strategies.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
