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We utilize a quasi-experimental setting that exogenously changes costs to acquire the targeted firm to examine the relationship between costs to acquire the target and alliance decisions. We find that firms with increased acquisition costs, due to the increased takeover protection, tend to experience alliances more than their comparison group. Furthermore, we examine boundary conditions for this relationship--intra-industry transaction and resource redeployability. Our analyses also reveal that, when the costs of acquisition increase, 1) equity alliances are more likely to be adopted as a substitute; 2) acquisitions become less likely; 3) alliance performance decreases; and 4) acquisition premiums increase. [ABSTRACT FROM AUTHOR]

We draw on prior studies on acquisitions and employee adverse behavior to examine how anticipated post-acquisition employee adverse behavior in a firm affects the likelihood of the firm becoming an acquisition target. We argue that the potential for adverse employee behavior from a public firm will be reflected in the potential acquirers' evaluations of the firm's future value and shape their acquisition decision. We exploit plausibly exogenous changes in state unemployment insurance (UI) benefits and empirically test how they affect a firm's likelihood of being an acquisition target from 1999 to 2017. Overall, the results strongly support our theory and are robust against potential alternative mechanisms and endogeneity concerns. [ABSTRACT FROM AUTHOR]

We utilize a quasi-experimental setting that exogenously changes costs to acquire the targeted firm, which allows us to examine the relationship between the costs of acquisitions and decisions to pursue alliances. We find that firms with increased acquisition costs, due to the increased takeover protection, are more likely to experience alliances than their comparison group and that equity alliances are more likely to be adopted to substitute for acquisitions than non-equity alliances. Our post-hoc analyses also reveal that when the cost of acquisition increases, acquisitions indeed become less likely and that the sequential investment relationship of alliances and acquisitions becomes less likely. Finally, we show that following an increase in takeover protection, alliance performance decreases and acquisition premium increases. [ABSTRACT FROM AUTHOR]

Despite an increasing academic interest in the interaction between organizations and geographic communities, we know little about how firms strategically align themselves to communities, and when they benefit from such practices. Based on research on resource dependence and institutional legacies, we develop a theory on community alignment by organizations. We propose that organizations can attempt to align by adjusting key organizational elements or fulfilling the community's social needs. The benefits of such efforts can offset the added costs, particularly at times of financial crisis, through the forging of mutual dependency which offers an informational advantage, access to community social capital and joint actions. Testing our hypotheses using data from the U.S. commercial banking industry, we find that banks with stronger organizational and social community alignment are less likely to fail, especially during economic crises. Our theory and findings contribute to research on organization and community interactions, institutional legacies, and competition between large and small corporations. [ABSTRACT FROM AUTHOR]

Despite the importance of choice between acquisitions and alliances for accessing resources located outside a company, previous research has not considered the behavioral drivers of such choices. To fill this gap, this paper examines how firms' choice of alliances vs. acquisitions is based on an evaluation of performance from the same as well as the other mode relative to the respective aspirations. We argue that while a lower acquisition/alliance performance results in a higher likelihood of choosing the alternative mode, the relationship is stronger in the above-aspiration domain than in the below-aspiration domain for both types of performance feedback. We also predict that the effect of performance feedback derived from acquisitions is stronger than that of that from alliances, and that these types of feedback moderate one another. We test and find support for our predictions using a sample of alliances and acquisitions completed by Fortune 500 companies. This study extends research on corporate strategy by providing a behavioral explanation of the choice between acquisitions and alliances. It also enriches the behavioral theory of the firm by providing new insight into why and how the effect of performance changes when it is below and above aspirations. [ABSTRACT FROM AUTHOR]

Given the incessant contestation of power inside an organization, how dominant coalitions maintain their power over time is an important topic. We develop a theory on how powerful actors manage their power based on performance feedback. Performance relative to aspiration level signals either competence or inadequacy of the incumbent leadership. The dominant coalition responds to the performance feedback by ceding or fortifying its power so as to manage the contestation toward it and maintain its power. As such, performance feedback represents for the dominant coalition both a threat and an opportunity for its dominance. We test this framework in the context of CEO succession in publicly-listed family firms, the organizations that are characterized by latent contestation between controlling family owners and nonfamily constituencies. Our analysis of Korean family businesses from 2002 to 2008 supports our framework. The controlling family owners resorted to succession by nonfamily CEO when firm performance fell below aspiration level, but engaged in succession by family CEO when performance rose above aspiration. The relative power of the family versus nonfamily constituencies moderated these effects. In addition, the controlling family handed over the CEO post to the subsequent family generation when firm performance is satisfactory and it has more power. Our study sheds light on the management of power, and contributes to research on performance feedback and succession in family business. [ABSTRACT FROM AUTHOR]

This paper theorizes and tests that an emergence of new market category depends on the diversity of the categories subordinate to it, and the acceptance of those sub-categories by audience influences the relationship. Categories in the market have a nested structure, in which the categories subordinate to a new category works as concrete examples through which audience make sense of the superordinate category. When a market category is nascent, then greater diversity among sub-categories below the nascent category can deter a formation of social codes for it, and thus can slow down the growth of the market for it. However, when audience can draw upon other product categories to make sense of the new product, then the diversity of its sub-categories can facilitate the market growth, because audiences tend to appreciate diversity in well-accepted products. I test these hypotheses using the unique data on a birth of the American music record industry between 1890 and 1928. Specifically I compared the evolution of the markets for classical recordings and for jazz recordings, because these music genres had strikingly different acceptance by audience in the beginning. However those acceptance had changed over time during this era. The contributions to the literature on market category, entrepreneurship, and industry emergence are discussed. [ABSTRACT FROM AUTHOR]