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The pre-deal phase of an acquisition is complex, with high stakes, and high uncertainty. Consequently, acquisition decision making can be seen as an inherently political process. While political behavior is a central concept in organizational theory, and despite its inevitability during acquisition decision making due to the contested nature of the pre-deal phase, there is a shortage of theory and evidence concerning the antecedents, consequences, and moderators of political behavior. To address these theoretical shortcomings, we develop and test a theoretical model of political behavior focusing on the TMT’s psychological context. We argue that while political behavior risks undermining acquisition performance, the degree of board involvement during the pre-deal phase can enable some TMTs to attenuate the damaging effects of political behavior. Further, we theorize two key antecedents variously fueling and constraining political behavior. We contend that while TMT cohesion reduces political behavior, cognitive diversity increases political behavior while suppressing the potential for TMT cohesion to prevent political behavior. We test our theoretical model using a field-based sample of 109 UK acquisitions, combining multiple informants with objective secondary data.

Intuition plays a vital role in strategic decision-making, enabling executives to cut through complexity and to navigate the information processing challenges posed by dynamic environments. However, enduring questions remain concerning the antecedents and the effectiveness of intuitive strategic decision-making. Accordingly, we used critical incident technique and conducted in-depth interviews with top managers from 27 UK firms, focusing on recent intuitive ‘hits’ and ‘misses’. We explore these recent strategic decision episodes to provide an in-depth and nuanced understanding of intuition in strategic decision-making, contributing to the literature in two important ways. First, we build theory concerning the contextual triggers that foster the use of intuition, and second, we derive insights into the contextual factors that render intuition more, as well as less effective. We offer a series of theoretical and practical insights whereby intuition can be leveraged as a vital input to the strategic decision-making process.

During the pre-merger phase of an acquisition, fundamental decisions are made concerning whether to buy, which company to buy, and how much to pay. Further, acquisitions carry significant firm-wide implications requiring input from multiple different specializations, and hence, they are the product of the judgments, decisions, and social interactions between top managers. We focus our theory development on a pivotal yet under-researched top management team characteristic, transactive memory system (TMS). TMS is the shared division of cognitive labor with respect to encoding, storing, and retrieving knowledge from individual areas of expertise. We theorize that TMT transactive memory directly influences the strategic decision making process, which in turn determines acquisition performance. We test our hypotheses with a sample of 109 acquisitions, combining survey and archival data. We find that TMT transactive memory increases reliance on expert intuition and procedural rationality, while reducing political behavior; and each of these three strategic decision processes carries different implications for acquisition performance. Our study advances theory by explaining the team-level behavioral mechanisms that underlie acquisition performance.

Decision speed and quality are both vital for organizational survival and prosperity. However, they are assumed to be in tension, and there has been limited theory development concerning whether, and if so how, both are attainable. To address this gap, we turn to behavioral integration which captures the intensity of intra-team interactions. While behavioral integration is considered an antecedent of decision quality, it is presumed to slow decision-making, and overall, there remains a “black box” surrounding the mechanisms, behaviors, and processes which transmit behavioral integration to decision outcomes. Our theoretical account challenges the notion of behavioral integration being an impediment to decision speed, and we present new theory and evidence—comprising a mixed-method field study—explaining how behavioral integration acts as a key driver of both decision speed and quality, while theorizing decision uncertainty as a new and important boundary condition.

Acquisitions are among the most complex, exacting, intractable, and high stakes decisions faced by Top Management Teams (TMTs). Consequently, they are inherently political in nature—provoking conflicting viewpoints and power struggles among executives. While political behavior is a central construct in organizational theory, and despite widespread acknowledgement of its inevitable presence in Mergers and Acquisitions (M&A) decision making, there is a shortage of theory and evidence concerning its antecedents and consequences. Consequently, to address this gap, we draw upon the upper echelons literature to develop and test a theoretical model of political behavior in M&A decision making. Focusing on the psychological context surrounding the TMT, we theorize that TMT cognitive diversity fuels political behavior which in turn undermines acquisition performance. Critically, we also theorize that TMT cohesion serves as the central generative mechanism enabling acquirers to counteract the effects of TMT cognitive diversity and thereby dampen damaging political behavior. We test our theoretical model using a field sample of 109 acquisitions in the UK, utilizing direct psychometric measures validated with objective secondary performance data. The results support our theory, and TMT cognitive diversity leads to political behavior during M&A decision making. TMT cohesion reduces political behavior, it also interacts with cognitive diversity, and contrary to our theory, cognitive diversity appears to weaken the benefits of cohesion. Based on these findings, we discuss the important theoretical and practical implications

The riddle of diversity remains unresolved; it can spur innovation and creativity, yet also give rise to hostile conflict. Indeed, disagreement abounds as to whether cognitive diversity—which represents differences in ideas, preferences and beliefs among top managers concerning firm strategy—leads to positive or negative outcomes. While meta-analyses have concluded that the consequences of cognitive diversity among upper echelons executives are largely negative; the fact remains that the effects of diversity vary considerably across different studies, indicating the presence of unknown moderators and mediators. Hence in this study, recognizing the embeddedness of top managers within their firm and broader environmental context, we build new theory concerning moderating and mediating influences on the effects of cognitive diversity. We test our theory on a multi-informant, multi-source sample of 117 strategic decisions. We find a main negative effect of cognitive diversity on top management team behavioral integration, and that behavioral integration mediates the negative effects of cognitive diversity on decision comprehensiveness. We further develop new knowledge by drawing on resource-based theory, and we theorize that firm size and environmental hostility moderate the effects of cognitive diversity on behavioral integration and on comprehensiveness.

The riddle of diversity remains unresolved; it can spur innovation and creativity, yet also give rise to hostile conflict. Indeed, disagreement abounds as to whether cognitive diversity—which represents differences in ideas, preferences and beliefs among top managers concerning firm strategy—leads to positive or negative outcomes. While meta-analyses have concluded that the consequences of cognitive diversity among upper echelons executives are largely negative; the fact remains that the effects of diversity vary considerably across different studies, indicating the presence of unknown moderators and mediators. Hence in this study, recognizing the embeddedness of top managers within their firm and broader environmental context, we build new theory concerning moderating and mediating influences on the effects of cognitive diversity. We test our theory on a multi-informant, multi-source sample of 117 strategic decisions. We find a main negative effect of cognitive diversity on top management team behavioral integration, and that behavioral integration mediates the negative effects of cognitive diversity on decision comprehensiveness. We further develop new knowledge by drawing on resource-based theory, and we theorize that firm size and environmental hostility moderate the effects of cognitive diversity on behavioral integration and on comprehensiveness.