Practice what you preach? The influence of strategic dissonance on the stock market reaction

dc.contributor.advisorAalbers, R.
dc.contributor.authorFreund, Franziska
dc.description.abstractHigh volatility in the technology industry requires companies to be able to quickly adjust to changes. This often calls for strategic actions that are not in line with the original strategic intent, leading to strategic dissonance. Technological acquisitions are a common strategic action companies engage in, in order to adapt to those changes. In this research, it is assumed that strategic dissonance through technological acquisitions is represented in the extent to which the strategic intent is reflected in the motives for an acquisition. Although regarded as very important, the pre-deal phase and the effect strategic dissonance has on the stock market has not been researched much until now. Therefore, the aim of this thesis is to analyze the effect of strategic dissonance on the stock market. Accordingly, the research question answered in this thesis is “To what extent does the presence of strategic dissonance influence the stock market reaction to a technological acquisition and how does this effect change with different levels of R&D intensity?”. Secondary data collected by Aalbers, McCarthy, and Huisman (2020) is combined with data gathered through a quantitative content analysis. The sample consists of 1415 technological acquisitions conducted between 2001 and 2006. Three hypotheses are tested: Hypothesis 1 stating that there is a negative effect of an acquisition announcement on the stock market reaction; hypothesis 2 claiming that this relationship is moderated by strategic dissonance; hypothesis 3 stating that the moderating effect of strategic dissonance differs under different levels of R&D intensity. A t-test and a multiple regression analysis are conducted to test these hypotheses. Inconsistent with literature, the effect of an acquisition announcement on the stock market is not found to be significant. However, contrary to expectations, there seems to be a U-shaped relationship between strategic dissonance and stock market reaction. This indicates that companies should either engage in technological acquisitions that completely differ from the strategic intent, or in technological acquisitions that are in line with the original strategy. Moderate levels of strategic dissonance are considered to lead to negative results. R&D intensity is not found to significantly moderate this relationship.en_US
dc.thesis.facultyFaculteit der Managementwetenschappenen_US
dc.thesis.specialisationStrategic Managementen_US
dc.thesis.studyprogrammeMaster Business Administrationen_US
dc.titlePractice what you preach? The influence of strategic dissonance on the stock market reactionen_US
Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
1.69 MB
Adobe Portable Document Format