Group decision making

Although recognized as an important stage of the merger and acquisition (M&A) process, little is understood about the processes that unfold during deal negotiations. In line with recent qualitative research highlighting the role of interorganizational trust, I examine the role of acquirer trust during M&A negotiations. Specifically, through two essays, I consider the effects of acquirer trust on two outcome variables: the acquisition premium and target executive retention. In Essay One, I integrate the social embeddedness theory and agency theory and find that acquirer trust leads to higher premiums. In Essay Two, I integrate the social embeddedness perspective with justice theory and find that the positive relationship between acquirer trust and target executive retention is mediated by justice. Boundary conditions are also considered in each essay. These two essay provide contributions to the nascent literature on M&A negotiations and the complex role of trust in M&A negotiations.

Testing a new theory of dynamic social influence, 39 mock juries in two studies deliberated student honor court cases by electronic mail. After reading about each case, participants sent and received messages to a spatially coherent or random subset of jurors on each of five sessions. Individuals appeared to take their role of juror seriously and were responsive to each others' arguments; one-third changed their verdicts after receiving two out of two opposing messages and just over half changed in the face of four of four opposing messages. Polarization toward the majority verdict was common in both studies; however, consistent with a key prediction of dynamic social impact theory, unanimity was suppressed among the spatial compared to random juries by the emergence of spatially distinct subgroups. Clustering and polarization were prevalent even among juries passing as few as two messages per juror each round, providing strong evidence that DSIT applies even to important issues.