Neo-Charismatic Leadership and the Fate of Mergers and Acquisitions: An Institutional Model of CEO Leadership

By Tikhomirov, Aleksey A.; Spangler, William D. | Journal of Leadership & Organizational Studies, February 2010 | Go to article overview

Neo-Charismatic Leadership and the Fate of Mergers and Acquisitions: An Institutional Model of CEO Leadership


Tikhomirov, Aleksey A., Spangler, William D., Journal of Leadership & Organizational Studies


Abstract

CEOs face complex situational demands at each phase of the merger process. We offer an institutional perspective on how pre-merger and post-merger objectives and demands translate into CEO leadership role requirements. By illustrating how these role requirements are well-served by CEO neo-charismatic leadership, we answer why the rise of CEO neo-charismatic leadership is relevant to the merger context. Our model contributes to the institutional understanding of the merger process and its demands, and specifies forms of executive leadership needed for mergers to be successful.

Keywords

Neo-charismatic leadership, institutional theory, mergers, acquisitions

**********

What predicts merger and acquisition (M&A) success remains unexplained by research (Hitt, Harrison, Ireland, & Best, 1998). The following factors have been previously explored: human resource issues (Napier, 1989), integration activities (Zollo & Singh, 2004), organizational learning (Vermeulen & Barkema, 2001), cultural fit (Weber & Camerer, 2003), and others. We might expect leadership to be cited among these major factors. After all, studies in finance and strategic management credit leadership as the determinant of M&A performance (Fulmer & Gilkey, 1988; Haspeslagh & Jemison, 1991; Schweiger, Ivancevich, & Power, 1987). Indeed, given an important role of organizational change in mergers, studies of M&As were encouraged in terms of neo-charismatic leadership (Bass, 1990). Bass's (1990) optimism was well justified: Neo-charismatic theories proved to be credible executive "road maps" to leading macro- and micro-level change processes. As witnessed by a considerable and growing body of work that applies neo-charismatic theories to the study of mergers, Bass's call is enjoying productive scholarly response (Nemanich & Keller, 2007; Nemanich & Vera, 2009; Waldman & Javidan, 2009).

This emergent body of work advances the knowledge about the role of neo-charismatic leadership in M&As. Many leadership aspects of the M&A phenomenon are yet to be clarified. Despite the tapestry of ideas and thoughts, existing efforts still do not offer a comprehensive answer to the important question: Why should neo-charismatic leadership emerge in the M&A context? What exactly is it about the M&A process itself that makes the assumptions of emergence and performance of neo-charismatic leadership plausible? So far these questions have been left unexplored. Proliferation of research on CEOs and their leadership as a mechanism to realize the merger opportunities have not offered much guidance in understanding the linkages between the merger process, CEO leadership, and the merger performance. Exactly when and how merger performance might be best understood in terms of CEO leadership?

With neo-charismatic leadership (Bass, 1985; Podsakoff, MacKenzie, Moorman, & Fetter, 1990) and the process-based view of acquisitions (Haspeslagh & Jemison, 199 I) as our foundation, we envision success in premerger preparation and postmerger integration as demanding different aspects of CEO neo-charismatic leadership. Our model examines how situational demands translate into specific leadership role requirements. It suggests what a CEO is supposed to do to ensure merger success. Finally, we envision that the premerger demands, leadership role requirements, and neo-charismatic behaviors are representative of what is expected from both the acquirer's CEO and the target's CEO. Naturally, our rationalization of the neocharismatic leadership at the postmerger applies to the CEO of the unified firm alone.

CEO Leadership and the Fate of Mergers: An Illustration

M&As have been one of the more notable strategies for corporate growth in recent decades. In the first half of 2004, the total value of M&As reached $394.2 billion (Grone, 2004). …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Neo-Charismatic Leadership and the Fate of Mergers and Acquisitions: An Institutional Model of CEO Leadership
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.