Liberating Leadership Style & Short-run Success of American Takeovers.

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In the present research, we provide empirical evidence whether the leadership style, and in particular, the liberating leadership style, is a driver of the short-run success of U.S. mergers and acquisitions (M&As), building upon shareholders' wealth as a measure of success. Through the use of content analysis of 191 CEOs, our contribution compared to former works is the use of a new approach to gauge the leadership style of an organization and therefore to analyze M&As operations success. Using a sample of M&As of S&P 500 listed companies within 2000 to 2013, we find that bidders displaying more liberating leadership style are more likely to produce short-term success. This supports the hypothesis that the leadership style granting employees' needs of growth, self direction and freedom, as well as of being treated intrinsically equal enhances employees' well-being and firm profitability. Our findings also suggest that the bidder’s leadership style has no significant effect on the cumulative abnormal returns of the target firm.

Author(s):

Ibtissem Rouine    
Université Lille 2
France

Pascal Grandin    
Université Lille 2
France