Why Companies Do Not Pursue Attractive Mergers and Acquisitions ...

The study’s main contribution to theory is a framework that helps to explicate why companies do not proceed with attractive opportunities. Two key research questions are addressed:

The acquisition process is conceptualised as a temporally sequential series of phases with specific tasks, inputs, and outputs. The findings cover a phase (or period) in the process that begins after a candidate has been subjected to strategic and financial evaluations and has been found to be attractive and ends before implementation in the form of a bid or entry into negotiations begins. Researchers have heretofore largely ignored this period in the process, noted in figure 1.1.

The approach taken in the study assumes that many of the factors that result in decision reversals can be anticipated and planned for so that forgone opportunities (i.e., attractively evaluated candidates) are reduced, more attractive candidates are acquired, and acquisition performance is improved. Alternatively, if the risks are significant that one or more of the factors might result in a reversed decision or stalled effort, better informed decisions about the level of effort and resources companies devote to an acquisition search may be made.

Figure 1.1. Period in the acquisition process on which this study focuses.

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Note. Phases, names, and content appear in a detailed flow chart in figure 1.3.