Essays on the sequencing of divestitures and acquisitions

Anguiano Herbolzheimer, Eva Christina

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Description

Title

Essays on the sequencing of divestitures and acquisitions

Author(s)

Anguiano Herbolzheimer, Eva Christina

Issue Date

2021-07-12

Director of Research (if dissertation) or Advisor (if thesis)

• Mahoney, Joseph T
• Schiven, Mario

Doctoral Committee Chair(s)

• Mahoney, Joseph T
• Schiven, Mario

Committee Member(s)

• Michael, Steven
• Clougherty, Joseph A
• Lieberman, Marvin B

Department of Study

Business Administration

Discipline

Business Administration

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

• Reconfiguration
• Divestitures
• Acquisitions

Abstract

This dissertation explores firms’ strategic redeployment of scarce resources through sequential corporate reconfiguration activities of divestitures and acquisitions. In particular, this research contributes to theory in strategic management by analyzing how sequential corporate transactions influence firm outcomes and considering how programs of strategic decisions lead to corporate renewal. The core theoretical insight from examining reconfiguration programs is that firms proactively free up resources in anticipation of future expansion or strategic redirection efforts, and that the additional resources available to firms after retrenchment can positively affect the extent to which they are able to implement strategy. The first study explores firms use of sequential divestitures and acquisitions to achieve corporate differentiation. This chapter finds that firms use corporate transactions to move further away from their competitors, resulting in a positioning that is more different from both the firms that were their major competitors before the transactions and the firms that the focal firm most closely competes with after the transactions. Thus, corporate renewal through internal redeployment of resources by divestiture is pursued by firms seeking to expand into new areas and differentiate themselves from competitors. The second study presents a comparative assessment of performance implications of different reconfiguration strategies. After comparing the performance of newly acquired business segments by divesting and non-divesting firms, the prediction that firms that strategically retrench to gather scarce resources will outperform firms that do not strategically free up resources is largely corroborated. However, the extent to which a firm can benefit from retrenchment depends on several boundary conditions, such as the type of business that is divested and the financial health of the firm.

Graduation Semester

2021-08

Type of Resource

Thesis

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Copyright and License Information

Copyright 2021 Eva C Anguiano Herbolzheimer

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