Research Questions
The author set out to conduct a review of the
empirical studies on the performance of companies after acquiring other
companies. This objective is clearly stated within the introductory paragraphs
of the paper (Tuch and O’Sullivan, 2007, p.142). The author proceeded on the
premise that available literature already indicates poor post acquisition
performance. It, therefore, remained for the researcher to ask why the volumes
of acquisitions continue to grow despite this negative finding.
Main Findings
Three major findings came out of the study.
First, the literature review confirmed the operating hypothesis that
acquisition does not have a significant positive impact on the performance of
the acquiring firm (Tuch and O’Sullivan, 2007, p.148). This finding held both in the short and long
run performance of the company. Secondly, the author was able to come to the
conclusion that the increasing volume of takeovers despite no associated
benefits could be attributed to the need by shareholders of the target
companies to discipline managers. Lastly, the author finds some support of the
fact that managers of acquiring firms may be using takeovers for their own
selfish interests. The author is, however, keen to note that this explanation
is not very clear.
Limitations of Work
The findings of the study are limited in
several respects. For one, the author admits that many of the empirical
literature reviewed by the study suffered from methodological flaws (Tuch and
O’Sullivan, 2007, p.143). One can expect such flaws to negatively impact on the
study itself. In addition, the findings of the study are somehow mixed making
it difficult to generalize.
Contributions
The article succeeds in answering the seminar
question better than in many prior studies by improving on the methodologies.
It also introduces other aspects into the discussion in a manner that previous
studies had failed to achieve.
Reference
Tuch, C., and O’Sullivan, N., 2007.The Impact of
Acquisitions on Firm Performance: A Review of
the Evidence. International Journal of
Management Reviews, 9(2), 141-170.
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