TY - JOUR
T1 - A paradox of synergy
T2 - Contagion and capacity effects in mergers and acquisitions
AU - Shaver, J. Myles
PY - 2006/10
Y1 - 2006/10
N2 - Integrating merged businesses to realize synergies can adversely affect the distribution of potential outcomes through two mechanisms: the contagion effect and the capacity effect. I describe these effects, highlight when they will be pronounced, and discuss their importance. My arguments demonstrate that an inherent element of synergy-based mergers and acquisitions is that actions to facilitate synergy capture can amplify threats and can inhibit firms' ability to respond to favorable conditions in the business environment.
AB - Integrating merged businesses to realize synergies can adversely affect the distribution of potential outcomes through two mechanisms: the contagion effect and the capacity effect. I describe these effects, highlight when they will be pronounced, and discuss their importance. My arguments demonstrate that an inherent element of synergy-based mergers and acquisitions is that actions to facilitate synergy capture can amplify threats and can inhibit firms' ability to respond to favorable conditions in the business environment.
UR - http://www.scopus.com/inward/record.url?scp=33750420218&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=33750420218&partnerID=8YFLogxK
U2 - 10.5465/AMR.2006.22527468
DO - 10.5465/AMR.2006.22527468
M3 - Article
AN - SCOPUS:33750420218
SN - 0363-7425
VL - 31
SP - 962
EP - 976
JO - Academy of Management Review
JF - Academy of Management Review
IS - 4
ER -