Takeover defense, collective action and the top management team

Abstract

Purpose

The purpose of the study is to examine the interaction between the structure of the top management team, takeover defense mechanisms and firms rate of collective actions.

Design/methodology/approach

The study uses elements of agency theory, prospect theory and competitive dynamics research to develop a model for examining heterogeneity in the rate of collective actions among firms in the technology sector. A sample of 299 firm-year observations arrayed into panel regression analyses is used.

Findings

The findings from this study show a positive relationship between the size of the top management team and the count of collective actions when takeover defense mechanisms are present. Further this study finds a negative relationship between top management team ownership and collective actions when these same takeover defense mechanisms are present. Additionally, the female ratio of the top management team is negatively related to collective actions.

Research limitations/implications

This study was conducted using a sample of technological firms. These relationships may not be generalizable to firms in other contexts. Further, other elements of the firm’s governance structure (i.e. board of directors or shareholders) may play an important role in the strategic decision-making process.

Originality/value

This study expands on existing research by linking several blocks of literature, top management team literature, competitive dynamics literature and corporate governance literature, into a model to examine firm structural characteristics on the heterogeneity in the propensity to formulate collective actions among firms.

Citation

Tribbitt, M.A. and Yang, Y. (2018), "Takeover defense, collective action and the top management team", Management Research Review, Vol. 41 No. 12, pp. 1375-1394. https://doi.org/10.1108/MRR-07-2017-0209