What Constrains or Facilitates Divestitures of Formerly Acquired Firms? The Effects of Organizational Inertia

By Katsuhiko (Katsu) Shimizu, Michael A. Hitt. 2005

210 citations recorded by the source corpus.

Subfields: Accounting, Management of Technology and Innovation, Organizational Behavior and Human Resource Management

View Paper: https://www.semanticscholar.org/paper/66f32544673f07cd0178b459bc5f619058475342

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Citations in the corpus

What Have We Acquired and What Should We Acquire in Divestiture Research? A Review and Research Agenda (2006, background): “On the other hand, established (“old”) firms have been argued to be less likely to divest because of stronger inertial forces (Shimizu & Hitt, 2005b).”
Prospect theory, behavioral theory, and the threat-rigidity thesis: Combinative effects on organizational decisions to divest formerly acquired units (2007, methodology): “A new outsider CEO often changes the course of a firm and its strategies ( Shimizu & Hitt, 2005; Weisbach, 1995); I used a dummy variable to capture such an arrival (“new outsider CEO” 1, “no new outsider CEO” 0). Another governance variable of importance was the proportion of insider directors who”
Corporate divestitures and family control (2016, background): “As such, organizational inertia against divestitures may be quite high, as evidenced by the empirical findings that these transactions typically follow management turnover events (Bigley and Wiersema, 2002; Hambrick, Geletkanycz, and Fredrickson, 1993; Wiersema and Bantel, 1992) and periods of under”
Strategic Entrepreneurship: Creating Value for Individuals, Organizations, and Society (2011, unknown): “Presumably, the divested resources create a weakness that when released removes a negative influence on firm performance (Shimizu & Hitt, 2005).”
A Signaling Theory of Acquisition Premiums: Evidence from IPO Targets (2012, methodology): “Our focus on the IPO target perspective is also a response to recent calls for research on “sell-side” considerations in work on M&A (e.g., Graebner & Eisenhardt, 2004; Haleblian, Devers, McNamara, Carpenter, & Davison, 2009; Shimizu & Hitt, 2005).”
Sunk Costs, Uncertainty and Market Exit: A Real Options Perspective (2009, background): “If one assumes that the neoclassical model describes economic rationality, then a relationship between sunk costs and exit can only be explained by theories premised on irrationality (e.g., Staw, 1981; Shimuzo and Hitt, 2005).”
Mergers and Acquisitions: Overcoming Pitfalls, Building Synergy, and Creating Value (2009, background): “Also, when parent firms have divestiture experience, they are more likely to divest acquired businesses (Shimizu & Hitt, 2005).”
Corporate life cycle and M&A activity (2010, background): “In contrast, old firms, despite the fact that they have more retained earnings, are less likely to make many acquisitions owing to organizational inertia (Davis and Stout, 1992; Shimizu and Hitt, 2005).”
Managing Firm Resources in Dynamic Environments to Create Value: Looking Inside the Black Box (2007, background): “However, research suggests that because of sunk-cost biases or organizational inertia, firms frequently delay divestment of underperforming assets (Shimizu & Hitt, 2005).”