identify the type of corporate restructuring that fits with common theories of what are assumed to be causes of mergers and acquisitions|Legit essays

Review Table 1-1 in the textbook and Figure 1-2 in the lecture.

In a 750-1,000 word paper, identify the type of corporate restructuring that fits with common theories of what are assumed to be causes of mergers and acquisitions.

DePamphilis, D. (2015). Mergers, acquisitions, and other restructuring activities (8th ed.). New York, NY: Elsevier Academic Press. ISBN-13: 9780128013908

SOLUTION

Corporate restructuring refers to the process of modifying the structure of a company, its operations, or its financial holdings in order to improve its profitability, efficiency, or competitiveness. Mergers and acquisitions (M&A) are one of the most common forms of corporate restructuring, and they have been the subject of extensive research in organizational theory and strategic management. In this paper, we will examine the causes of M&A activity and identify the type of corporate restructuring that fits with common theories of what are assumed to be their causes.

Causes of M&A Activity

There are several theoretical perspectives on the causes of M&A activity. Some of the most prominent theories include agency theory, resource-based theory, and institutional theory.

Agency theory suggests that M&A activity is driven by the need to address conflicts of interest between corporate managers and shareholders. According to this theory, corporate managers may be motivated to pursue M&A activity in order to increase their own personal wealth or to protect their jobs, even if it is not in the best interests of the company as a whole. Shareholders, on the other hand, may be motivated to sell their shares to a bidder if they believe that the current management is not maximizing shareholder value.

Resource-based theory suggests that M&A activity is driven by the need to acquire valuable resources or capabilities that are difficult to build internally. According to this theory, companies may pursue M&A activity in order to acquire unique assets or capabilities that can help them gain a competitive advantage in their market.

Institutional theory suggests that M&A activity is driven by the need to conform to societal norms and expectations. According to this theory, companies may pursue M&A activity in order to gain legitimacy or to avoid social sanctions. For example, a company may acquire ano