Time to complete the due diligence phase in mergers and acquisitions: impact of CEO psychological characteristics

Gada, Viswa Prasad; Popli, Manish; Malhotra, Shavin

doi:10.1080/00036846.2021.1931005

Cited by 7 publications

(5 citation statements)

References 79 publications

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“…For instance, it makes it possible to measure top managers’ RF by applying a content analysis of their written texts like annual reports or shareholder letters [ 24 ] and even study different countries’ leaders by analyzing their social media content (e.g., Twitter). Second, we cross the geographic and cultural boundary of the original dictionary by validating this instrument in Polish, which is in line with the recommendation by many publications to employ and test this measurement tool in various geographical contexts (e.g., [ 14 , 21 – 23 ]. Third, we go beyond the current domains where the RF LIWC dictionary were used in past: usually applied settings of management (e.g., [ 23 , 25 – 28 ]) Namely, we validated this instrument by analyzing texts related to a more universal topic—where participants described topics of importance in their everyday life.…”

Section: Introductionmentioning

confidence: 81%

“…Our research has some limitations. First, our goal was to adapt an instrument that was previously validated and applied in several research projects from different fields, such as psychology (e.g., [ 12 ]), economics (e.g., [ 21 ]), management (e.g., [ 14 ]), or even energy policy (e.g., [ 91 ]). One could argue that a translation—regardless of the thoroughness of the procedure we applied—may not capture all relevant expressions concerning the foci in a specific language or cultural context.…”

Section: Discussionmentioning

confidence: 99%

“…[ 12 ]), and economics or management (e.g. [ 14 , 21 ])—none of them provided a RF LIWC dictionary in Polish. This prevents applications of this tool in this language context.…”

Section: Introductionmentioning

confidence: 99%

“…Our analysis of articles citing the article introducing RF LIWC [10] has revealed that only one study by Zhang and colleagues [20] conducted such a translation and validation for the Chinese language. Yet, testing the predictions in other language contexts is relevant because many publications make suggestions to use this method in various geographical contexts (e.g., [14,[21][22][23]) which would not be possible in many countries with an original dictionary developed and validated in English. While the literature points to the use of the RF LIWC dictionary in studies of various fields-mostly from psychology (e.g.…”

Section: Introductionmentioning

confidence: 99%

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Promotion and prevention regulatory focus LIWC dictionary. Polish adaptation and validation

2023

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This article describes the adaptation and validation of a Polish version of the regulatory focus (RF) Linguistic Inquiry and Word Count (LIWC) dictionary. RF theory proposes that there are two types of self-regulation: promotion (focus on gains, growth, and ideals) and prevention (focus on losses, security, and oughts). Apart from self-report questionnaires, one method to measure RF includes a linguistic analysis. LIWC counts the frequency of words from relevant categories and presents the output as a percentage of all words used in a writing sample. RF LIWC contains two categories: promotion (e.g., achieve, ideal) and prevention (e.g., afraid, fail). To test the psychometric properties of our Polish adaptation of the RF LIWC instrument, we performed three studies. In Study 1 (N = 10), experts in RF theory rated the extent to which each dictionary entry was related to promotion and prevention foci. Results showed that words from the promotion category were rated as more promotion than prevention-related, and the pattern was reversed for words from the prevention category. In Study 2 (N = 130) we examined the divergent validity of the instrument by experimentally manipulating RF and testing the writing patterns. When a promotion focus was activated, individuals wrote more words from the promotion than prevention category, and the pattern was reversed in the prevention group. Study 3 (N = 414) investigated whether the promotion and prevention scores obtained through RF LIWC are linked with results obtained using a self-report questionnaire that measures chronic RF. Promotion scores from RF LIWC correlated positively with chronic promotion RF and prevention scores from RF LIWC correlated positively with chronic prevention RF. These preliminary findings provide initial support for the validity of the Polish adaptation of the RF LIWC.

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Section: Introductionmentioning

confidence: 81%

Section: Discussionmentioning

confidence: 99%

“…[ 12 ]), and economics or management (e.g. [ 14 , 21 ])—none of them provided a RF LIWC dictionary in Polish. This prevents applications of this tool in this language context.…”

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Promotion and prevention regulatory focus LIWC dictionary. Polish adaptation and validation

2023

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“…It is confirmed by Porsgaard et al (2018), who performed a research by semi-structured interviews and former M&A cases, and revealed that operative due diligence is a basic step in the process of decision-making about a purchase. Gada et al (2021), with the use of completed M&A deals with public companies, found out that directors with greater focus on prevention extend the period needed by their companies to complete M&A deals. Rzepczynski and Black (2022) argue that valuating managerial skills for alternative investments is very difficult with due diligence.…”

Section: Introductionmentioning

confidence: 99%

Role of due diligence in business takeover

Vochozka,

Máška,

Kovač

2023

EiP

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Motivation: The topic of the article is of paramount importance in today’s ever-evolving business landscape. As companies strive to expand their operations and stay ahead of the competition, mergers and acquisitions have become a popular strategy. However, the risks and complexities associated with these transactions cannot be overlooked. Understanding the role of due diligence is essential for any organization considering a business takeover. It serves as a powerful tool to uncover potential risks, assess the viability of the transaction, and make well-informed decisions. By conducting a thorough due diligence process, companies can identify financial discrepancies, legal liabilities, operational inefficiencies, and hidden risks that may impact the success of the transaction.Aim: The goal of the research was to analyze to what extent is the resulting value of a business is affected by improperly performed due diligence. The method used for data collection was in-debt literature research based on the Web of Science database. Subsequent content analysis was used to identify the 10 most common errors that can occur during the process of due diligence. The following research used the data obtained from answering the first research question with. Ishikawa fishbone diagram was used as a specific method of causal analysis.Results: The main findings include the identification of the most common errors occurring during the performance of due diligence, such as wrong financial analysis, incomplete financial accounts, Incomplete accounting statements, or adjusting entries for receivables. The main causes include excessive work pressure on auditors, past due receivables, poor supplier vetting, or failure to document the application of prices. The research is beneficial for auditors or audited companies so that they could avoid such errors. However, there are also several limitations as it is very time and cost-consuming to deal with due diligence on a company-by-company basis. Also, the application of Ishikawa fishbone diagram and brainstorming prior to diagram depends on the number of experts involve. Another limitation is that the research results applied under current accounting legislation only, and there are different laws and regulations in different countries.

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Due diligence speed in technology acquisitions: the impact of top management team’s social capital

Popli,

Li,

et al. 2024

Asia Pac J Manag

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Time to complete the due diligence phase in mergers and acquisitions: impact of CEO psychological characteristics

Cited by 7 publications

References 79 publications

Promotion and prevention regulatory focus LIWC dictionary. Polish adaptation and validation

Promotion and prevention regulatory focus LIWC dictionary. Polish adaptation and validation

Role of due diligence in business takeover

Due diligence speed in technology acquisitions: the impact of top management team’s social capital

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