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.