Here is a passage I attempted and got 3 of 4 wrong. I have review the answer in the OG but cant seem to understand their method and explanation.
In an effort to explain why business acquisitions
often fail, scholars have begun to focus on the role
of top executives of acquired companies. Acquired
companies that retain their top executives tend to
(5)
have more successful outcomes than those that do
not. Furthermore, existing research suggests that
retaining the highest-level top executives, such as the
CEO (chief executive officer) and COO (chief operating
officer), is related more positively to post acquisition
(10)
success than retaining lower-ranked top executives.
However, this explanation, while insightful, suffers from
two limitations. First, the focus on positional rank does
not recognize the variation in length of service that
may exist in top executive posts across companies,
(15)
nor does it address which particular top executives
(with respect to length of service) should be retained
to achieve a successful acquisition outcome. Second,
the relationship between retained top executives and
acquisition outcomes offered by existing research
(20)
is subject to opposing theoretical explanations
related to length of service. The resource-based view
(RBV) suggests that keeping acquired company top
executives with longer organizational tenure would lead
to more successful outcomes, as those executives
(25)
have idiosyncratic and nontransferable knowledge
of the acquired company that would be valuable for
the effective implementation of the acquisition. The
opposing position, offered by the upper echelons
perspective (UEP), suggests that retaining top
(30)
executives having short organizational tenure would
lead to more successful outcomes, as they would have
the adaptability to manage most effectively during the
uncertainty of the acquisition process
Responding to these limitations, Bergh conducted
(35)
a study of executive retention and acquisition
outcome that focused on the organizational tenure of
retained company top executives in 104 acquisitions,
followed over 5 years. Bergh considered the
acquisition successful if the acquired company was
(40)
retained and unsuccessful if it was divested. Bergh's
findings support the RBV position. Apparently, the
benefits of long organizational tenure lead to more
successful outcomes than the benefits of short
organizational tenure. While longer tenured top
(45)
executives may have trouble adapting to change, it
appears that their perspectives and knowledge bases
offer unique value after the acquisition. Although
from the UEP position it seems sensible to retain
less tenured executives and allow more tenured
(50)
ones to leave, such a strategy appears to lower the
probability of acquisition success.
MY NOTES:
PARA 1 acqusition fail
- top exec retain is good
-lower top not so good
-length of service
RBV - non trans knowledge
UEP uncertainty
PARA 2
Bergh for RBV. higher success than UEP
My answers
427 B
428 C
429 D
430 A
I will appreciate it if you can scan my notes and advise