You're Fired! A Complex Adaptive Systems Perspective of Post-Merger and Acquisition Executive Turnover

Abstract:     
Since the publication of Organization Science’s 1999 Special Issue on complexity theory, researchers have applied this paradigm to various organizational phenomena. In this paper, we examine post-merger and acquisition (M&A) executive turnover from a Complex Adaptive Systems (CAS) perspective. This lens integrates and subsumes the existing literature on this phenomenon, which is fragmented, incomplete, and lacking in an overarching theory. The observation of a power law distribution in target firm TMT rates for a sample of 70 U.S. acquisitions valued over US$ 1 billion from 1997 to 1999, at the height of the 1990s M&A wave, supports our interpretation.

Keywords: Mergers and acquisitions, executive turnover, power law, Complex Adaptive System, Self-organized criticality, top management team

JEL Classification: G34, J44, M51

working papers series