Document Type
Article
Publication Date
4-1-2009
Abstract
Successful mergers and acquisitions require its managers to achieve substantial performance improvements in order to sufficiently cover acquisition premiums, the expected return of debt and equity investors, and the additional resources needed to capture synergies and accelerate growth. Acquirers understand that achieving the performance improvements necessary to cover these costs and create value for investors will most likely require an incredible effort from M&A management teams. This understanding drives the common and longstanding practice of offering hefty performance incentive packages to key managers, assuming that incentives will induce behaviors that champion organizational change and growth. This practice is in direct conflict with academic theory and research which posit that extra-role behaviors, such as championing behaviors, are beyond the influence of formal reward systems. The present study debunks the assumptions of this common M&A practice, providing quantitative evidence that shared vision is a more effective driver of championing behaviors.
Keywords
organizational behavior, mergers and acquisitions, self-determination theory, autonomous motivation, financial incentives, extra-role behaviors, taking charge
Rights
© The Author(s). Kelvin Smith Library provides access for non-commercial, personal, or research use only. All other use, including but not limited to commercial or scholarly reproductions, redistribution, publication or transmission, whether by electronic means or otherwise, without prior written permission is strictly prohibited.
Department/Center
Design & Innovation
Recommended Citation
Clayton, Byron C., "When Practice and Theory Conflict: Do Financial Incentives Influence Championing Behaviors in Mergers and Acquisitions?" (2009). Student Scholarship. 529.
https://commons.case.edu/studentworks/529