Abstract
Phase One (of three) Qualitative Study interviewed twenty employee stock ownership plan (ESOP) acquiring and ten Target Company Executives with both successful and unsuccessful acquisition experience. The twenty acquiring executives completed 442 acquisitions with a 95% success rate. The Phase Two Quantitative Study was marketed to three US ESOP Associations, emailed to 3700 members, and eighty-six respondents discovered greater than a 95% success rate from 467 acquisitions. Since the two previous studies were self-reported by ESOP executives, a third party viewpoint was obtained for a Phase Three study by interviewing twenty-five consultants. Sixteen consultants were experienced with ESOP acquisitions and nine consultants had experience with non-ESOP acquisitions. The non-ESOP consultants completed 525 acquisitions with 74% meeting the buyer’s expectations and 23% exceeding their expectations. The ESOP consultants completed 268 acquisitions with 91% meeting the buyer’s expectations and 43% exceeding their expectations. ESOP executives are risk averse, meticulously select their target companies, and attempt to match cultures even prior to the acquisition. Organizational behaviors of Shared Vision, Strategic Planning, Ethical Values, Long Term Orientation, Altruistic Behavior, and Organizational Empowerment influenced these successful acquisitions. A majority of ESOPs implement open book management and open door communication practices, which personally and financially empowers their employees. In 2016, the Dealogic Research Institute reported that withdrawn and rejected non-ESOP acquisitions were at the highest level since 2007, and that the US had the most deals withdrawn; moreover, failed deals set new records as 47% of acquisitions appeared to not be worth the deal.
Details
Presentation Type
Paper Presentation in a Themed Session
Theme
KEYWORDS
ESOP Acquisitions, Organizational Behaviors, Shared Vision, Long-Term Orientation, Strategic Planning, Ethical Values, Altruistic Behavior, Organizational Empowerment, Productive Acquisitions, Successful Acquisitions, Progressive Management Strategies, Open Book Management, Open Door Communication, Servant Leadership, Collective Action
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