Managerial Resistance to Divest : The Role of Psychological Inhibitors in the Formation of Divestiture Decisions
Type
conference paper
Date Issued
2010-05-19
Author(s)
Abstract
Divestitures have become an important topic on the agenda of many firms, especially during the recent economic downturn. Based upon psychological constructs of cognitions, emotions, and hope, this paper presents a framework to explain how managerial reluctance to divest might evolve in the formation of divestiture decisions and is likely to affect the timing of the divestiture. From this framework, a set of testable propositions is derived and discussed for future empirical research endeavours. The paper concludes that the timing of divestiture decisions can be improved by rationalizing the decision process through the definition of formal divestiture criteria and implementing processes to ensure that divestiture is routinely considered. Moreover, it is important to build managerial and organizational capabilities that recognize divestitures as an unavoidable strategic process to explore future growth opportunities rather than a managerial failure.
Language
English
Keywords
Divestiture
Strategic Decisions
Managerial Reluctance
Psychological Inhibitors
HSG Classification
contribution to scientific community
Refereed
Yes
Book title
EURAM 2010: Back to the Future
Publisher
European Academy of Management
Publisher place
Brüssel
Start page
22
Event Title
10th Annual European Academy of Management Conference (EURAM) 2010
Event Location
Rome
Event Date
19.-22.05.2010
Subject(s)
Division(s)
Eprints ID
61860