Key To A Takeout’s Success? Keeping the Right Employees

A recent study suggests that executive retention often makes or breaks a company post-acquisition. The trick, the study reveals, lies in deciding which key employees of a target an acquiror should dismiss or retain. In “Executive Retention and Acquisition Outcomes: A Test of Opposing Views On The Influence Of Organizational Tenure,” Donald Bergh, an associate professor of management at Penn State University, examined 104 U.S. acquisitions over a five-year period, and analyzed the top executives (VP and above) of the targets. He then studied the influence of these executives and how they might affect the outcome of the acquisition. However, Bergh did not give any specific examples in his study, and could not be reached. Also, a spokesman for the university proved unable to provide specifics.