Managerial hubris
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Managerial hubris is the unrealistic belief held by managers in bidding firms that they can manage the assets of a target firm more efficiently than the target firm's current management.
Managerial hubris is one reason top managers, e.g., CEOs[1] and board directors,[2] may choose to invest in a merger that on average generates no profits.[3]
See also
References
- ^ Malmendier, Ulrike; Tate, Geoffrey (2008). "Who makes acquisitions? CEO overconfidence and the market's reaction". Journal of Financial Economics. 89 (1): 20–43. doi:10.1016/j.jfineco.2007.07.002. S2CID 12354773.
- ^ Twardawski, Torsten; Kind, Axel (2023). "Board overconfidence in mergers and acquisitions". Journal of Business Research. 165 (1). doi:10.1016/j.jbusres.2023.114026.
- ^ Jay B. Barney and William S. Hesterly (2008). Strategic Management and Competitive Advantages. Pearson Prentice Hall. pp. 380. ISBN 0-13-613520-X.