Top Management Team Complementarity's Impact on the Diversification-Performance Relationship

This study examined the impact of complementary top management teams (defined as functional experience differences between the acquiring and acquired firms) on post-acqusition performance. Based on a sample of 147 acqusitions between 1986-88, we find that complementary backgrounds have a positive impact on post-acquisition performance in both related and unrelated acqusitions. Another major finding is that complementarity is negatively related amongst top management team turnover of acquired managers. Finally, top management team turnover among acquired managers is negatively related to post-acquisition performance.