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Are Acquisitions A Poison Pill For Innovation?, Michael A. Hitt, Robert E. Hoskisson, R. Duane Ireland, Jeffrey S. Harrison
Are Acquisitions A Poison Pill For Innovation?, Michael A. Hitt, Robert E. Hoskisson, R. Duane Ireland, Jeffrey S. Harrison
Management Faculty Publications
The recent wave of acquisition activity may be damaging the innovative capabilities of American firms, thus making them less competitive in the global marketplace. In fact, acquisitions often serve as a substitute for innovation, which may cause further neglect of internal research and development (R&D) programs. Additionally, acquisitions often lead to increases in leverage, diversification, and absorb significant amounts of executive time, which may lead to reduced managerial commitment to innovation.
In this article, evidence is presented suggesting that acquisition activity may result in reductions in R&D inputs and outputs. On average, the 191 firms in the sample reduced their …
Strategic Competitiveness In The 1990s: Challenges And Opportunities For U.S. Executives, Michael A. Hitt, Robert E. Hoskisson, Jeffrey S. Harrison
Strategic Competitiveness In The 1990s: Challenges And Opportunities For U.S. Executives, Michael A. Hitt, Robert E. Hoskisson, Jeffrey S. Harrison
Management Faculty Publications
U.S. firms face a major global competitiveness challenge. Although the problems relate, in part, to differences in the economic structure, history and cultural differences between the U.S. and foreign rivals, these factors may not explain as much of the variance in competitiveness as they did in the past. Competitiveness problems are also linked to a number of strategic factors under the control of managers. Among them are the absorption of managerial energy in mergers and acquisitions, increasing levels of debt, increasing firm size, greater firm diversification, lack of investment in human capital and inappropriate corporate culture.
In response to these …