This paper analyzes data on 461 large U.S. industrial corporations to \ndetermine the factors that led large firms to participate in the wave of diversifying acquisitions that peaked in the late 1960s. We elaborate and test a class theory of corporate acquisitions, maintaining that \nfirms pursued acquisitions in this period when they were commanded by \nwell-networked challengers who were central in elite social networks but\n relatively marginal with respect to social status, isolated from the \nresistance of established elites, and free from control of owning \nfamilies. We also consider a wide range of factors highlighted by \nalternative accounts of acquisition likelihood, including resource \ndependence, institutional pressures, and principal-agent conflicts. The \nresults provide support for our main theoretical arguments, even when \ncontrols related to alternative explanations are taken into account.
Published Paper, 2001
Administrative Science Quarterly, 46(1)
Page(s): 87-120
Abstract