Legitimacy Needs as Drivers of Business Exit

ISBN-13: 9783834909367 / Angielski / Miękka / 2008 / 181 str.

Carolin Decker; Univ -Prof Dr Thomas Mellewigt; Thomas Mellewigt

Opis

Foreword A diversified firm's withdrawal from a business unit (i.e. business exit) is a very - portant phenomenon in management practice. In fact, studies from the U.S. show that approximately 2,500 business units are sold each year. According to a survey of the consulting firm Accenture among 150 executives from the Fortune 1000 companies, 59 % of the persons polled are momentarily divesting at least one business unit. - though divestitures are highly relevant in practice, researchers in strategic management tend to prefer investigating the counterpart of exit, namely the acquisition of business units. Trying to fill this gap, Ms. Decker's dissertation aims to shed light on the impact of business exit on the corporate strategy of the divesting parent firm. First, Ms. Decker summarizes the literature on business exit from the last three d- ades in a systematic and comprehensible way. This is a deserving task since the l- erature on this topic is widely dispersed, e.g. in the field of finance, amongst others. Referring to the existing findings, the literature review shows that prior research has mainly focused on two questions: "What factors promote business exit?" and "What are the financial outcomes of business exit for the divesting parent firm?." Drawing on this background, the author convincingly argues that, up to now, the strategic impli- tions of business exit for the divesting parent firm have largely been ignored.

Spis treści

Antecedents of business exit, barriers to business exits, outcomes of business exits, the need for legitimacy as a trigger of fit-enhancing vs. status quo preserving business exit, types of legitimacy needs and their role as drivers of fit-enhancing vs. status quo preserving business exit, the moderating effect of uncertainty

O autorze

Dr. Carolin Decker ist wissenschaftliche Mitarbeiterin von Univ.-Prof. Dr. Thomas Mellewigt am Institut für Management der Freien Universität Berlin.

Blurb

A diversified firm’s withdrawal from a business unit, i.e. business exit, is a significant phenomenon in management practice. Although divestitures are highly relevant in practice, the acquisition of business units attracts much more attention in strategic management research.

Carolin Decker develops and empirically applies a framework in which business exits serve the purpose of re-establishing a firm’s previously harmed legitimacy. She suggests four types of legitimacy needs that are to be satisfied with the divestiture of a business unit and the simultaneous pursuit of strategic reorientation. The author tests the theoretical framework with secondary data on 213 business exits. Her findings support the idea that legitimacy needs drive the likelihood of fit-enhancing business exits in divesting firms.