Acquaintance or Stranger? Chief Executive officer’s Temporal Focus and Target Choice in Corporate Acquisition

Abstract

The selection of a potential target for acquisition is an important yet underexplored topic in strategic management. Using a multidimensional framework of Chief executive officer (CEO) temporal focus, this study proposes that the choice of an acquiring firm between a target with previous alliances and that with no alliance is predicted by the temporal focus of CEOs (future, present, and past). In addition, such a relationship is contingent on organizational slack. Analysis of 336 global acquisition deals from two high technological industries reveals that firms headed by CEOs with strong future/present focus are likely to acquire targets that have no alliances with their companies. By contrast, CEOs with a strong past focus are likely to acquire targets that have previous alliances with their firms. However, increased organizational slack reduces the past-focused CEOs’ probability of acquiring previous partners.