Divesting on Time: How Decision-Making Processes Influence Divestiture Outcomes

Abstract

Existing research on corporate divestitures focuses on the antecedents and outcomes of divestiture events. The impact of the divestiture decision-making process is still largely under-investigated. This paper uses an in-depth qualitative research approach based on multiple case studies to analyze how the process by which divestiture decisions are made influences their outcome. The findings indicate that the context and configuration of process parameters such as analytical comprehensiveness, formalization, and level of stakeholder involvement can explain differences in divestiture outcomes. One key result is that the impact of these process parameters differs considerably between the informal and formal decision-making phases.

Keywords: Divestiture, Process Research, Strategic Decision Making, Case Study

JEL Classification: M21, G34, D70, L00