Mitigation of Overcommitment in M&A Decision-Making: Explorations from the Lab and the Field
Type
conference paper
Date Issued
2020-10-30
Author(s)
Abstract
The prevalence of managerial biases is well documented in strategy research. Yet, we know relatively little about their potential mitigation. In this study, we explore the mitigation of managerial overcommitment in the M&A decision-making process. Drawing on the psychology literature we propose two distinct mitigation approaches: Oppositive reasoning, which actuates the consideration of outcomes that are diametrically opposed to currently hold assumptions, and disclosive reasoning, where the anticipation of justification requests prompts a more careful evaluation of information. In an experimental study, we find significant evidence for the effectiveness of both debiasing strategies. We then examine these approaches outside of the lab. Drawing on qualitative field data of 32 M&A departments, we explore the adoption and perceived impediments of these approaches in organizations with different organizational structures.
Language
English
Keywords
Behavioral Theory
Decision Processes
M&A
HSG Classification
contribution to scientific community
Event Title
SMS 40th Annual Conference
Event Location
London, UK
Event Date
October 19-30, 2020
Subject(s)
Division(s)
Contact Email Address
michael.theisen@unisg.ch
Eprints ID
262013